Re: [AFMUG] Buying and selling ISP’s

[Lewis Bergman]

Don't forget about the few million dollars in upgrades every year. That
takes a pretty big chunk of it.

On Mon, Aug 24, 2020 at 9:36 PM Matt Hoppes <
mattli...@rivervalleyinternet.net> wrote:

> Because the IRS likes to tax that. I’d rather spend the vaults on the
> network and my employees than keep it in the vault.
>
> That said - we do have a small war chest.
>
> On Aug 24, 2020, at 10:04 PM, Mike Hammett  wrote:
>
> 
> I've often wondered how WISPs without competitors don't have Scrooge
> McDuck vaults full of money.
>
> The last time I counted, my network touched over 20 other fixed wireless
> service providers of one kind or another.
>
>
>
> -
> Mike Hammett
> Intelligent Computing Solutions <http://www.ics-il.com/>
> <https://www.facebook.com/ICSIL>
> <https://plus.google.com/+IntelligentComputingSolutionsDeKalb>
> <https://www.linkedin.com/company/intelligent-computing-solutions>
> <https://twitter.com/ICSIL>
> Midwest Internet Exchange <http://www.midwest-ix.com/>
> <https://www.facebook.com/mdwestix>
> <https://www.linkedin.com/company/midwest-internet-exchange>
> <https://twitter.com/mdwestix>
> The Brothers WISP <http://www.thebrotherswisp.com/>
> <https://www.facebook.com/thebrotherswisp>
>
>
> <https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg>
> --
> *From: *"Matt Hoppes" 
> *To: *"AnimalFarm Microwave Users Group" 
> *Sent: *Monday, August 24, 2020 8:05:04 PM
> *Subject: *Re: [AFMUG] Buying and selling ISP’s
>
> I’ve often thought if a competitor ever came into town - I won’t give up.
>
> That’s surrender. No, I’ll go to war. It’s invasion of my territory. May
> the best man win.
>
> If need be I’ll offer free plans for the first year and free installs.
>
> I had a competitor come in once, 35 million USDA grant. Guns were blazing.
> Made threats about they had enough money to advertise us out of business.
>
> They are now bankrupt and not even a thought.
>
> On Aug 24, 2020, at 8:54 PM, Dave  wrote:
>
> 
>
> Fight the Dying of the light .. Dont go out without a fight..
>
> All I gotta say is they may take away our spectrum and slap us with more
> reporting and more fees but Bring dat shiz
>
> We got this.. All said and done who can outlast the brute fist of the
> Gorilla.
>
> Ill get off my soap box now ... you cant stop the tanker in me LOL!
>
>
> On 8/23/2020 11:17 AM, Jeff Broadwick - Lists wrote:
>
> I have a couple theories about the selling market:
>
> 1.  There’s never been more cash floating around our industry.  It
> provides options.  There is also a good chance that smaller WISPs are about
> to be over built with government money...another strong inducement to make
> your best deal.
>
> 2.  As an industry, we are about 20 years old.  If you started the
> business in your 40s or 50s, you might be easy to retire.  If you started
> it younger, you might be ready to cash out and go do something else.
>
> Jeff Broadwick
> CTIconnect
> 312-205-2519 Office
> 574-220-7826 Cell
> jbroadw...@cticonnect.com
>
> On Aug 23, 2020, at 11:54 AM, Ken Hohhof 
>  wrote:
>
> 
>
> I seem to remember this thread started with a post about buying, but there
> seems to be a lot of interest in selling.  I wonder why.
>
>
>
> Is it because customers are getting on our nerves?  I know they’re getting
> on mine.  Everyone is stuck in their house doing everything on the Internet
> and whining about it and waiting until the last minute and then needing
> stuff right now this minute because we’re
> streaming/gaming/Zooming/eLearning/teleworking here.  Plus doing
> construction on our house and the contractors are here right now taking
> your dish off the roof or putting siding nails through your cable.  Or
> they’re buying/selling houses because interest rates are like zero or to
> move away from the virus or to a different school district.
>
>
>
>
>
> *From:* AF   *On Behalf
> Of *Mike Hammett
> *Sent:* Sunday, August 23, 2020 10:05 AM
> *To:* AnimalFarm Microwave Users Group  
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> I know it *CAN* be anything.
>
>
>
> I'm asking what it is for successful, arms-length, nothing special
> transactions. I do expect there to be a range.
>
>
>
>
>
> -
> Mike Hammett
> Intelligent Computing Solutions <http://www.ics-il.com/>
> <https://www.facebook.com/ICSIL>
> <https://plus.google.com/+IntelligentComputingSolutionsDeKalb>
> <https://www.linkedin.com/company/intelligent-computing-solutio

Re: [AFMUG] Buying and selling ISP’s

[Lewis Bergman]

Now that's funny.

On Mon, Aug 24, 2020 at 9:53 PM Steve Jones 
wrote:

> My boss has a guy the goes in front of him laying crisp new 100 dollar
> Bill's down for him to walk on so he doesnt sully his shoes walking in the
> same path poor people walk on, has a second guy that follows behind with a
> brush burner so those pesky poors dont pick the money up and exit their
> caste
>
> On Mon, Aug 24, 2020, 9:36 PM Matt Hoppes <
> mattli...@rivervalleyinternet.net> wrote:
>
>> Because the IRS likes to tax that. I’d rather spend the vaults on the
>> network and my employees than keep it in the vault.
>>
>> That said - we do have a small war chest.
>>
>> On Aug 24, 2020, at 10:04 PM, Mike Hammett  wrote:
>>
>> 
>> I've often wondered how WISPs without competitors don't have Scrooge
>> McDuck vaults full of money.
>>
>> The last time I counted, my network touched over 20 other fixed wireless
>> service providers of one kind or another.
>>
>>
>>
>> -
>> Mike Hammett
>> Intelligent Computing Solutions <http://www.ics-il.com/>
>> <https://www.facebook.com/ICSIL>
>> <https://plus.google.com/+IntelligentComputingSolutionsDeKalb>
>> <https://www.linkedin.com/company/intelligent-computing-solutions>
>> <https://twitter.com/ICSIL>
>> Midwest Internet Exchange <http://www.midwest-ix.com/>
>> <https://www.facebook.com/mdwestix>
>> <https://www.linkedin.com/company/midwest-internet-exchange>
>> <https://twitter.com/mdwestix>
>> The Brothers WISP <http://www.thebrotherswisp.com/>
>> <https://www.facebook.com/thebrotherswisp>
>>
>>
>> <https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg>
>> --
>> *From: *"Matt Hoppes" 
>> *To: *"AnimalFarm Microwave Users Group" 
>> *Sent: *Monday, August 24, 2020 8:05:04 PM
>> *Subject: *Re: [AFMUG] Buying and selling ISP’s
>>
>> I’ve often thought if a competitor ever came into town - I won’t give up.
>>
>> That’s surrender. No, I’ll go to war. It’s invasion of my territory. May
>> the best man win.
>>
>> If need be I’ll offer free plans for the first year and free installs.
>>
>> I had a competitor come in once, 35 million USDA grant. Guns were
>> blazing. Made threats about they had enough money to advertise us out of
>> business.
>>
>> They are now bankrupt and not even a thought.
>>
>> On Aug 24, 2020, at 8:54 PM, Dave  wrote:
>>
>> 
>>
>> Fight the Dying of the light .. Dont go out without a fight..
>>
>> All I gotta say is they may take away our spectrum and slap us with more
>> reporting and more fees but Bring dat shiz
>>
>> We got this.. All said and done who can outlast the brute fist of the
>> Gorilla.
>>
>> Ill get off my soap box now ... you cant stop the tanker in me LOL!
>>
>>
>> On 8/23/2020 11:17 AM, Jeff Broadwick - Lists wrote:
>>
>> I have a couple theories about the selling market:
>>
>> 1.  There’s never been more cash floating around our industry.  It
>> provides options.  There is also a good chance that smaller WISPs are about
>> to be over built with government money...another strong inducement to make
>> your best deal.
>>
>> 2.  As an industry, we are about 20 years old.  If you started the
>> business in your 40s or 50s, you might be easy to retire.  If you started
>> it younger, you might be ready to cash out and go do something else.
>>
>> Jeff Broadwick
>> CTIconnect
>> 312-205-2519 Office
>> 574-220-7826 Cell
>> jbroadw...@cticonnect.com
>>
>> On Aug 23, 2020, at 11:54 AM, Ken Hohhof 
>>  wrote:
>>
>> 
>>
>> I seem to remember this thread started with a post about buying, but
>> there seems to be a lot of interest in selling.  I wonder why.
>>
>>
>>
>> Is it because customers are getting on our nerves?  I know they’re
>> getting on mine.  Everyone is stuck in their house doing everything on the
>> Internet and whining about it and waiting until the last minute and then
>> needing stuff right now this minute because we’re
>> streaming/gaming/Zooming/eLearning/teleworking here.  Plus doing
>> construction on our house and the contractors are here right now taking
>> your dish off the roof or putting siding nails through your cable.  Or
>> they’re buying/selling houses because interest rates are like zero or to
>> move away from the virus or to a di

Re: [AFMUG] Buying and selling ISP’s

[Steve Jones]

My boss has a guy the goes in front of him laying crisp new 100 dollar
Bill's down for him to walk on so he doesnt sully his shoes walking in the
same path poor people walk on, has a second guy that follows behind with a
brush burner so those pesky poors dont pick the money up and exit their
caste

On Mon, Aug 24, 2020, 9:36 PM Matt Hoppes 
wrote:

> Because the IRS likes to tax that. I’d rather spend the vaults on the
> network and my employees than keep it in the vault.
>
> That said - we do have a small war chest.
>
> On Aug 24, 2020, at 10:04 PM, Mike Hammett  wrote:
>
> 
> I've often wondered how WISPs without competitors don't have Scrooge
> McDuck vaults full of money.
>
> The last time I counted, my network touched over 20 other fixed wireless
> service providers of one kind or another.
>
>
>
> -
> Mike Hammett
> Intelligent Computing Solutions <http://www.ics-il.com/>
> <https://www.facebook.com/ICSIL>
> <https://plus.google.com/+IntelligentComputingSolutionsDeKalb>
> <https://www.linkedin.com/company/intelligent-computing-solutions>
> <https://twitter.com/ICSIL>
> Midwest Internet Exchange <http://www.midwest-ix.com/>
> <https://www.facebook.com/mdwestix>
> <https://www.linkedin.com/company/midwest-internet-exchange>
> <https://twitter.com/mdwestix>
> The Brothers WISP <http://www.thebrotherswisp.com/>
> <https://www.facebook.com/thebrotherswisp>
>
>
> <https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg>
> ------
> *From: *"Matt Hoppes" 
> *To: *"AnimalFarm Microwave Users Group" 
> *Sent: *Monday, August 24, 2020 8:05:04 PM
> *Subject: *Re: [AFMUG] Buying and selling ISP’s
>
> I’ve often thought if a competitor ever came into town - I won’t give up.
>
> That’s surrender. No, I’ll go to war. It’s invasion of my territory. May
> the best man win.
>
> If need be I’ll offer free plans for the first year and free installs.
>
> I had a competitor come in once, 35 million USDA grant. Guns were blazing.
> Made threats about they had enough money to advertise us out of business.
>
> They are now bankrupt and not even a thought.
>
> On Aug 24, 2020, at 8:54 PM, Dave  wrote:
>
> 
>
> Fight the Dying of the light .. Dont go out without a fight..
>
> All I gotta say is they may take away our spectrum and slap us with more
> reporting and more fees but Bring dat shiz
>
> We got this.. All said and done who can outlast the brute fist of the
> Gorilla.
>
> Ill get off my soap box now ... you cant stop the tanker in me LOL!
>
>
> On 8/23/2020 11:17 AM, Jeff Broadwick - Lists wrote:
>
> I have a couple theories about the selling market:
>
> 1.  There’s never been more cash floating around our industry.  It
> provides options.  There is also a good chance that smaller WISPs are about
> to be over built with government money...another strong inducement to make
> your best deal.
>
> 2.  As an industry, we are about 20 years old.  If you started the
> business in your 40s or 50s, you might be easy to retire.  If you started
> it younger, you might be ready to cash out and go do something else.
>
> Jeff Broadwick
> CTIconnect
> 312-205-2519 Office
> 574-220-7826 Cell
> jbroadw...@cticonnect.com
>
> On Aug 23, 2020, at 11:54 AM, Ken Hohhof 
>  wrote:
>
> 
>
> I seem to remember this thread started with a post about buying, but there
> seems to be a lot of interest in selling.  I wonder why.
>
>
>
> Is it because customers are getting on our nerves?  I know they’re getting
> on mine.  Everyone is stuck in their house doing everything on the Internet
> and whining about it and waiting until the last minute and then needing
> stuff right now this minute because we’re
> streaming/gaming/Zooming/eLearning/teleworking here.  Plus doing
> construction on our house and the contractors are here right now taking
> your dish off the roof or putting siding nails through your cable.  Or
> they’re buying/selling houses because interest rates are like zero or to
> move away from the virus or to a different school district.
>
>
>
>
>
> *From:* AF   *On Behalf
> Of *Mike Hammett
> *Sent:* Sunday, August 23, 2020 10:05 AM
> *To:* AnimalFarm Microwave Users Group  
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> I know it *CAN* be anything.
>
>
>
> I'm asking what it is for successful, arms-length, nothing special
> transactions. I do expect there to be a range.
>
>
>
>
>
> -
> Mike Hammett
> Intelligent Computing Solutions <http://www.ics-il.com/>
> <https://ww

Re: [AFMUG] Buying and selling ISP’s

[Matt Hoppes]

Because the IRS likes to tax that. I’d rather spend the vaults on the network 
and my employees than keep it in the vault. 

That said - we do have a small war chest. 

> On Aug 24, 2020, at 10:04 PM, Mike Hammett  wrote:
> 
> 
> I've often wondered how WISPs without competitors don't have Scrooge McDuck 
> vaults full of money.
> 
> The last time I counted, my network touched over 20 other fixed wireless 
> service providers of one kind or another.
> 
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> 
> From: "Matt Hoppes" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Monday, August 24, 2020 8:05:04 PM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> I’ve often thought if a competitor ever came into town - I won’t give up. 
> 
> That’s surrender. No, I’ll go to war. It’s invasion of my territory. May the 
> best man win. 
> 
> If need be I’ll offer free plans for the first year and free installs. 
> 
> I had a competitor come in once, 35 million USDA grant. Guns were blazing. 
> Made threats about they had enough money to advertise us out of business. 
> 
> They are now bankrupt and not even a thought. 
> 
> On Aug 24, 2020, at 8:54 PM, Dave  wrote:
> 
> 
> Fight the Dying of the light .. Dont go out without a fight..
> 
> All I gotta say is they may take away our spectrum and slap us with more 
> reporting and more fees but Bring dat shiz 
> 
> We got this.. All said and done who can outlast the brute fist of the Gorilla.
> 
> Ill get off my soap box now ... you cant stop the tanker in me LOL!
> 
> 
> 
> On 8/23/2020 11:17 AM, Jeff Broadwick - Lists wrote:
> I have a couple theories about the selling market:
> 
> 1.  There’s never been more cash floating around our industry.  It provides 
> options.  There is also a good chance that smaller WISPs are about to be over 
> built with government money...another strong inducement to make your best 
> deal.
> 
> 2.  As an industry, we are about 20 years old.  If you started the business 
> in your 40s or 50s, you might be easy to retire.  If you started it younger, 
> you might be ready to cash out and go do something else.
> 
> Jeff Broadwick
> CTIconnect
> 312-205-2519 Office
> 574-220-7826 Cell
> jbroadw...@cticonnect.com
> 
> On Aug 23, 2020, at 11:54 AM, Ken Hohhof  wrote:
> 
> 
> I seem to remember this thread started with a post about buying, but there 
> seems to be a lot of interest in selling.  I wonder why.
>  
> Is it because customers are getting on our nerves?  I know they’re getting on 
> mine.  Everyone is stuck in their house doing everything on the Internet and 
> whining about it and waiting until the last minute and then needing stuff 
> right now this minute because we’re 
> streaming/gaming/Zooming/eLearning/teleworking here.  Plus doing construction 
> on our house and the contractors are here right now taking your dish off the 
> roof or putting siding nails through your cable.  Or they’re buying/selling 
> houses because interest rates are like zero or to move away from the virus or 
> to a different school district.
>  
>  
> From: AF  On Behalf Of Mike Hammett
> Sent: Sunday, August 23, 2020 10:05 AM
> To: AnimalFarm Microwave Users Group 
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> I know it *CAN* be anything.
>  
> I'm asking what it is for successful, arms-length, nothing special 
> transactions. I do expect there to be a range.
>  
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Saturday, August 22, 2020 10:28:58 PM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> That can be anything.  There is no connection between revenue and earnings.  
> You can have $2M in revenue  but -$5M in income if you burned cash to 
> generate sales.
> 
> Sent from my iPhone
>  
> On Aug 22, 2020, at 7:35 PM, Mike Hammett  wrote:
> 
> 
> Right, but what I'm asking is that if 5x EDIBTA = Y, then what was Y / annual 
> revenue?
> 
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Saturday, August 22, 2020 10:01:44 AM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> Whatever 5x your earnings are.  Not sales or revenue or gross profit but 
>

Re: [AFMUG] Buying and selling ISP’s

[Mike Hammett]

I've often wondered how WISPs without competitors don't have Scrooge McDuck 
vaults full of money. 

The last time I counted, my network touched over 20 other fixed wireless 
service providers of one kind or another. 




- 
Mike Hammett 
Intelligent Computing Solutions 

Midwest Internet Exchange 

The Brothers WISP 




- Original Message -

From: "Matt Hoppes"  
To: "AnimalFarm Microwave Users Group"  
Sent: Monday, August 24, 2020 8:05:04 PM 
Subject: Re: [AFMUG] Buying and selling ISP’s 


I’ve often thought if a competitor ever came into town - I won’t give up. 


That’s surrender. No, I’ll go to war. It’s invasion of my territory. May the 
best man win. 


If need be I’ll offer free plans for the first year and free installs. 


I had a competitor come in once, 35 million USDA grant. Guns were blazing. Made 
threats about they had enough money to advertise us out of business. 


They are now bankrupt and not even a thought. 



On Aug 24, 2020, at 8:54 PM, Dave  wrote: 







Fight the Dying of the light .. Dont go out without a fight.. 
All I gotta say is they may take away our spectrum and slap us with more 
reporting and more fees but Bring dat shiz 

We got this.. All said and done who can outlast the brute fist of the Gorilla. 
Ill get off my soap box now ... you cant stop the tanker in me LOL! 


On 8/23/2020 11:17 AM, Jeff Broadwick - Lists wrote: 


I have a couple theories about the selling market: 


1. There’s never been more cash floating around our industry. It provides 
options. There is also a good chance that smaller WISPs are about to be over 
built with government money...another strong inducement to make your best deal. 


2. As an industry, we are about 20 years old. If you started the business in 
your 40s or 50s, you might be easy to retire. If you started it younger, you 
might be ready to cash out and go do something else. 


Jeff Broadwick 
CTIconnect 

312-205-2519 Office 
574-220-7826 Cell 
jbroadw...@cticonnect.com 



On Aug 23, 2020, at 11:54 AM, Ken Hohhof  wrote: 








I seem to remember this thread started with a post about buying, but there 
seems to be a lot of interest in selling. I wonder why. 

Is it because customers are getting on our nerves? I know they’re getting on 
mine. Everyone is stuck in their house doing everything on the Internet and 
whining about it and waiting until the last minute and then needing stuff right 
now this minute because we’re streaming/gaming/Zooming/eLearning/teleworking 
here. Plus doing construction on our house and the contractors are here right 
now taking your dish off the roof or putting siding nails through your cable. 
Or they’re buying/selling houses because interest rates are like zero or to 
move away from the virus or to a different school district. 




From: AF  On Behalf Of Mike Hammett 
Sent: Sunday, August 23, 2020 10:05 AM 
To: AnimalFarm Microwave Users Group  
Subject: Re: [AFMUG] Buying and selling ISP’s 


I know it *CAN* be anything. 



I'm asking what it is for successful, arms-length, nothing special 
transactions. I do expect there to be a range. 





- 
Mike Hammett 
Intelligent Computing Solutions 

Midwest Internet Exchange 

The Brothers WISP 




- Original Message -


From: "Chuck McCown" < ch...@wbmfg.com > 
To: "AnimalFarm Microwave Users Group" < af@af.afmug.com > 
Sent: Saturday, August 22, 2020 10:28:58 PM 
Subject: Re: [AFMUG] Buying and selling ISP’s 

That can be anything. There is no connection between revenue and earnings. You 
can have $2M in revenue but -$5M in income if you burned cash to generate 
sales. 

Sent from my iPhone 




On Aug 22, 2020, at 7:35 PM, Mike Hammett < af...@ics-il.net > wrote: 







Right, but what I'm asking is that if 5x EDIBTA = Y, then what was Y / annual 
revenue? 



- 
Mike Hammett 
Intelligent Computing Solutions 

Midwest Internet Exchange 

The Brothers WISP 




- Original Message -


From: "Chuck McCown" < ch...@wbmfg.com > 
To: "AnimalFarm Microwave Users Group" < af@af.afmug.com > 
Sent: Saturday, August 22, 2020 10:01:44 AM 
Subject: Re: [AFMUG] Buying and selling ISP’s 

Whatever 5x your earnings are. Not sales or revenue or gross profit but bottom 
line earnings on your income statement/ pl. Your taxable income. 

Sent from my iPhone 




On Aug 22, 2020, at 8:16 AM, Mike Hammett < af...@ics-il.net > wrote: 







What does the revenue multiplier end up being, though? 

5x EBIDTA / revenue gets you what, in purchases that have been made? 



- 
Mike Hammett 
Intelligent Computing Solutions 

Midwest Internet Exchange 

The Brothers WISP 




- Original Message -


From: "Chuck McCown" < ch...@wbmfg.com > 
To: "AnimalFarm Microwave Users Group" < af@af.afmug.com > 
Sent: Friday, August 21, 2020 8:20:47 PM 
Subject: Re: [AFMUG] Buying and selli

Re: [AFMUG] Buying and selling ISP’s

[Matt Hoppes]

I’ve often thought if a competitor ever came into town - I won’t give up. 

That’s surrender. No, I’ll go to war. It’s invasion of my territory. May the 
best man win. 

If need be I’ll offer free plans for the first year and free installs. 

I had a competitor come in once, 35 million USDA grant. Guns were blazing. Made 
threats about they had enough money to advertise us out of business. 

They are now bankrupt and not even a thought. 

> On Aug 24, 2020, at 8:54 PM, Dave  wrote:
> 
> 
> Fight the Dying of the light .. Dont go out without a fight..
> 
> All I gotta say is they may take away our spectrum and slap us with more 
> reporting and more fees but Bring dat shiz 
> 
> We got this.. All said and done who can outlast the brute fist of the Gorilla.
> 
> Ill get off my soap box now ... you cant stop the tanker in me LOL!
> 
> 
> 
> On 8/23/2020 11:17 AM, Jeff Broadwick - Lists wrote:
>> I have a couple theories about the selling market:
>> 
>> 1.  There’s never been more cash floating around our industry.  It provides 
>> options.  There is also a good chance that smaller WISPs are about to be 
>> over built with government money...another strong inducement to make your 
>> best deal.
>> 
>> 2.  As an industry, we are about 20 years old.  If you started the business 
>> in your 40s or 50s, you might be easy to retire.  If you started it younger, 
>> you might be ready to cash out and go do something else.
>> 
>> Jeff Broadwick
>> CTIconnect
>> 312-205-2519 Office
>> 574-220-7826 Cell
>> jbroadw...@cticonnect.com
>> 
>>> On Aug 23, 2020, at 11:54 AM, Ken Hohhof  wrote:
>>> 
>>> 
>>> I seem to remember this thread started with a post about buying, but there 
>>> seems to be a lot of interest in selling.  I wonder why.
>>>  
>>> Is it because customers are getting on our nerves?  I know they’re getting 
>>> on mine.  Everyone is stuck in their house doing everything on the Internet 
>>> and whining about it and waiting until the last minute and then needing 
>>> stuff right now this minute because we’re 
>>> streaming/gaming/Zooming/eLearning/teleworking here.  Plus doing 
>>> construction on our house and the contractors are here right now taking 
>>> your dish off the roof or putting siding nails through your cable.  Or 
>>> they’re buying/selling houses because interest rates are like zero or to 
>>> move away from the virus or to a different school district.
>>>  
>>>  
>>> From: AF  On Behalf Of Mike Hammett
>>> Sent: Sunday, August 23, 2020 10:05 AM
>>> To: AnimalFarm Microwave Users Group 
>>> Subject: Re: [AFMUG] Buying and selling ISP’s
>>>  
>>> I know it *CAN* be anything.
>>>  
>>> I'm asking what it is for successful, arms-length, nothing special 
>>> transactions. I do expect there to be a range.
>>>  
>>> 
>>> 
>>> -
>>> Mike Hammett
>>> Intelligent Computing Solutions
>>> 
>>> Midwest Internet Exchange
>>> 
>>> The Brothers WISP
>>> 
>>> 
>>> 
>>> From: "Chuck McCown" 
>>> To: "AnimalFarm Microwave Users Group" 
>>> Sent: Saturday, August 22, 2020 10:28:58 PM
>>> Subject: Re: [AFMUG] Buying and selling ISP’s
>>> 
>>> That can be anything.  There is no connection between revenue and earnings. 
>>>  You can have $2M in revenue  but -$5M in income if you burned cash to 
>>> generate sales.
>>> 
>>> Sent from my iPhone
>>>  
>>> On Aug 22, 2020, at 7:35 PM, Mike Hammett  wrote:
>>> 
>>> 
>>> Right, but what I'm asking is that if 5x EDIBTA = Y, then what was Y / 
>>> annual revenue?
>>> 
>>> 
>>> 
>>> -
>>> Mike Hammett
>>> Intelligent Computing Solutions
>>> 
>>> Midwest Internet Exchange
>>> 
>>> The Brothers WISP
>>> 
>>> 
>>> 
>>> From: "Chuck McCown" 
>>> To: "AnimalFarm Microwave Users Group" 
>>> Sent: Saturday, August 22, 2020 10:01:44 AM
>>> Subject: Re: [AFMUG] Buying and selling ISP’s
>>> 
>>> Whatever 5x your earnings are.  Not sales or revenue or gross profit but 
>>> bottom line earnings on your income statement/ pl. Your taxable income.
>>> 
>>> Sent from my iPhone
>>>  
>>> On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:
>>> 
>>> 
>>> What does

Re: [AFMUG] Buying and selling ISP’s

[Dave]

Fight the Dying of the light .. Dont go out without a fight..

All I gotta say is they may take away our spectrum and slap us with more 
reporting and more fees but Bring dat shiz


We got this.. All said and done who can outlast the brute fist of the 
Gorilla.


Ill get off my soap box now ... you cant stop the tanker in me LOL!


On 8/23/2020 11:17 AM, Jeff Broadwick - Lists wrote:

I have a couple theories about the selling market:

1.  There’s never been more cash floating around our industry.  It 
provides options.  There is also a good chance that smaller WISPs are 
about to be over built with government money...another strong 
inducement to make your best deal.


2.  As an industry, we are about 20 years old.  If you started the 
business in your 40s or 50s, you might be easy to retire.  If you 
started it younger, you might be ready to cash out and go do something 
else.


Jeff Broadwick
CTIconnect
312-205-2519 Office
574-220-7826 Cell
jbroadw...@cticonnect.com


On Aug 23, 2020, at 11:54 AM, Ken Hohhof  wrote:



I seem to remember this thread started with a post about buying, but 
there seems to be a lot of interest in selling.  I wonder why.


Is it because customers are getting on our nerves?  I know they’re 
getting on mine. Everyone is stuck in their house doing everything on 
the Internet and whining about it and waiting until the last minute 
and then needing stuff right now this minute because we’re 
streaming/gaming/Zooming/eLearning/teleworking here. Plus doing 
construction on our house and the contractors are here right now 
taking your dish off the roof or putting siding nails through your 
cable.  Or they’re buying/selling houses because interest rates are 
like zero or to move away from the virus or to a different school 
district.


*From:* AF  *On Behalf Of *Mike Hammett
*Sent:* Sunday, August 23, 2020 10:05 AM
*To:* AnimalFarm Microwave Users Group 
*Subject:* Re: [AFMUG] Buying and selling ISP’s

I know it *CAN* be anything.

I'm asking what it is for successful, arms-length, nothing special 
transactions. I do expect there to be a range.




-
Mike Hammett
Intelligent Computing Solutions <http://www.ics-il.com/>
<https://www.facebook.com/ICSIL><https://plus.google.com/+IntelligentComputingSolutionsDeKalb><https://www.linkedin.com/company/intelligent-computing-solutions><https://twitter.com/ICSIL>
Midwest Internet Exchange <http://www.midwest-ix.com/>
<https://www.facebook.com/mdwestix><https://www.linkedin.com/company/midwest-internet-exchange><https://twitter.com/mdwestix>
The Brothers WISP <http://www.thebrotherswisp.com/>
<https://www.facebook.com/thebrotherswisp>


<https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg>



*From: *"Chuck McCown" mailto:ch...@wbmfg.com>>
*To: *"AnimalFarm Microwave Users Group" <mailto:af@af.afmug.com>>

*Sent: *Saturday, August 22, 2020 10:28:58 PM
*Subject: *Re: [AFMUG] Buying and selling ISP’s

That can be anything.  There is no connection between revenue and 
earnings.  You can have $2M in revenue  but -$5M in income if you 
burned cash to generate sales.


Sent from my iPhone

On Aug 22, 2020, at 7:35 PM, Mike Hammett mailto:af...@ics-il.net>> wrote:



Right, but what I'm asking is that if 5x EDIBTA = Y, then what
was Y / annual revenue?



-
Mike Hammett
Intelligent Computing Solutions <http://www.ics-il.com/>

<https://www.facebook.com/ICSIL><https://plus.google.com/+IntelligentComputingSolutionsDeKalb><https://www.linkedin.com/company/intelligent-computing-solutions><https://twitter.com/ICSIL>
Midwest Internet Exchange <http://www.midwest-ix.com/>

<https://www.facebook.com/mdwestix><https://www.linkedin.com/company/midwest-internet-exchange><https://twitter.com/mdwestix>
The Brothers WISP <http://www.thebrotherswisp.com/>
<https://www.facebook.com/thebrotherswisp>


<https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg>

----

    *From: *"Chuck McCown" mailto:ch...@wbmfg.com>>
*To: *"AnimalFarm Microwave Users Group" mailto:af@af.afmug.com>>
*Sent: *Saturday, August 22, 2020 10:01:44 AM
*Subject: *Re: [AFMUG] Buying and selling ISP’s

Whatever 5x your earnings are.  Not sales or revenue or gross
profit but bottom line earnings on your income statement/ pl.
Your taxable income.

Sent from my iPhone

On Aug 22, 2020, at 8:16 AM, Mike Hammett mailto:af...@ics-il.net>> wrote:



What does the revenue multiplier end up being, though?

5x EBIDTA / revenue gets you what, in purchases that have
been made?



-
 

Re: [AFMUG] Buying and selling ISP’s

[Lewis Bergman]

Agreed. I sold some equity to a current partner. In retrospect, way too
cheaply. I should have sold it to him at a reasonable price and let him buy
into the rest as he could afford it.

On Sun, Aug 23, 2020 at 11:38 AM Chuck McCown  wrote:

> If they put skin in the game.  Big no to gifting equity.
>
> Sent from my iPhone
>
> On Aug 23, 2020, at 7:45 AM, Lewis Bergman 
> wrote:
>
> 
> ESOP isn't a compromise. It is a group of employees willing to risk what
> they have for what they want. I would rather sell to e employee's than
> anyone else.
>
> On Sun, Aug 23, 2020 at 7:09 AM Mark Radabaugh  wrote:
>
>> Or do the compromise between you and Matt - the ESOP where the employees
>> end up owning it.  You get nearly the same money out and they eventually
>> get the same deal - if they can keep it going and build it.   It’s harder
>> because you have to figure out how to both get it to cash out and build at
>> the same time.
>>
>> Mark
>>
>> On Aug 23, 2020, at 7:59 AM, Lewis Bergman 
>> wrote:
>>
>> This isn't the feel good kumbaya that might be popular, but I'll say this
>> on the subject of division of profits:
>> I started my WISP by myself. All of you who started with your own
>> checkbook and sweat know what that took. My family sacrificed as I worked
>> massive hours. I did everything from accounting to server builds
>> maintenance to installs and tech support. All while I was making about 1/3
>> of minimum wage while I did it. We lived off my wife's school teacher
>> salary.
>>
>> I did that for a pretty short time as we had some early success and after
>> a couple of years I started hiring people. By the time I sold I did what I
>> wanted when I wanted. The people I hired I paid better than average hourly
>> wages for the job and gave bonuses paying them for their work as they did
>> it. I never asked any of them to sacrifice like I did nor did they offer.
>>
>> I took all the risk. If we failed I was the one in financial ruin. They
>> could all walk away inconvenienced but fairly unscathed while I was
>> personally liable for all company credit cards, vendor payments, carrier
>> contracts, etc.
>>
>> And of course you can tell where this is going. Myself and the other
>> shareholders kept every dime and I sleep fine at night. I worked to help
>> get all the best employees jobs. Sure some were angry because they somehow
>> felt they deserved something. Those were also the same employees I could
>> have and probably should have already gotten rid of as they were problem
>> children. Risk and reward. I took the risk, I get the reward. You want
>> rewards? Take the risk.
>>
>> I did give a few people bonuses, help setup two in related businesses
>> without loans (funneled business their way) but it was not any kind of % or
>> really all that significant.I did that because they had been good people
>> first, hard workers second, and last but not least, made my life easier
>> when we were doing our thing.
>>
>> I am a capitlist and make no apologies for it.
>>
>> On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes <
>> mattli...@rivervalleyinternet.net> wrote:
>>
>>> Now that I think about it - I wonder if my plan of C would be a way to
>>> reduce income taxes too on the amount received?
>>>
>>> Either by funneling the money through the company and paying the
>>> employees or having the buying company write a check to each of the key
>>> employees.
>>>
>>> I’m not sure which would yield better results for everyone.
>>>
>>> The way I look at it though - I don’t have hard partners. That often
>>> leads to problems. But everyone who sticks with the company and especially
>>> if they make a career out of it should be compensated nicely - both each
>>> year out of proceeds they helped make as well as out of a major sale if it
>>> ever happens.
>>>
>>> If anyone here has ever worked for a company where the owner sold and
>>> got 2 million and you had worked there for 10 years building it up —— well,
>>> how did you feel?  Slap in the face.
>>> --
>>> AF mailing list
>>> AF@af.afmug.com
>>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>>
>>
>>
>> --
>> Lewis Bergman
>> 325-439-0533 Cell
>> --
>> AF mailing list
>> AF@af.afmug.com
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
>>
>> --
>> AF mailing list
>> AF@af.afmug.com
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
>
>
> --
> Lewis Bergman
> 325-439-0533 Cell
> --
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>
> --
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>


-- 
Lewis Bergman
325-439-0533 Cell
-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Lewis Bergman]

I am a big believer in building even if you are looking to sell. Probably
not in the majority or maybe even smart basic business sense. I have seen
too many buyouts go sideways. They all take a year to either complete or
fall apart. If I keep building I figure it doesn't matter if the sale goes
through or not. I either have more revenue/EBITDA to sell or more to keep.
At some point a price is fixed and at that point you need to already have
something in the contract to account for equipment purchases.

When I sold, JAB agreed to pay THEIR price for all equipment I bought after
the sell price was fixed. This allowed me to keep building. We were using
the same type of equipment they were so I don't think they cared a
whole lot. It made me feel better that I could walk away and not lose any
time and from my point of view, gave me better bargaining power because of
it.

Once the decision is made to sell, it often can be unrecoverable if things
fall apart. A mental suicide not for business leader I guess.

On Sun, Aug 23, 2020 at 10:58 AM Matt Hoppes <
mattli...@rivervalleyinternet.net> wrote:

> I’ve purchased almost everything around me at this point.
>
> What’s left?  Sell. Or build - which is what we’re doing now.
>
> On Aug 23, 2020, at 11:54 AM, Ken Hohhof  wrote:
>
> 
>
> I seem to remember this thread started with a post about buying, but there
> seems to be a lot of interest in selling.  I wonder why.
>
>
>
> Is it because customers are getting on our nerves?  I know they’re getting
> on mine.  Everyone is stuck in their house doing everything on the Internet
> and whining about it and waiting until the last minute and then needing
> stuff right now this minute because we’re
> streaming/gaming/Zooming/eLearning/teleworking here.  Plus doing
> construction on our house and the contractors are here right now taking
> your dish off the roof or putting siding nails through your cable.  Or
> they’re buying/selling houses because interest rates are like zero or to
> move away from the virus or to a different school district.
>
>
>
>
>
> *From:* AF  *On Behalf Of *Mike Hammett
> *Sent:* Sunday, August 23, 2020 10:05 AM
> *To:* AnimalFarm Microwave Users Group 
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> I know it *CAN* be anything.
>
>
>
> I'm asking what it is for successful, arms-length, nothing special
> transactions. I do expect there to be a range.
>
>
>
>
>
> -
> Mike Hammett
> Intelligent Computing Solutions <http://www.ics-il.com/>
> <https://www.facebook.com/ICSIL>
> <https://plus.google.com/+IntelligentComputingSolutionsDeKalb>
> <https://www.linkedin.com/company/intelligent-computing-solutions>
> <https://twitter.com/ICSIL>
> Midwest Internet Exchange <http://www.midwest-ix.com/>
> <https://www.facebook.com/mdwestix>
> <https://www.linkedin.com/company/midwest-internet-exchange>
> <https://twitter.com/mdwestix>
> The Brothers WISP <http://www.thebrotherswisp.com/>
> <https://www.facebook.com/thebrotherswisp>
>
>
> <https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg>
> --
>
> *From: *"Chuck McCown" 
> *To: *"AnimalFarm Microwave Users Group" 
> *Sent: *Saturday, August 22, 2020 10:28:58 PM
> *Subject: *Re: [AFMUG] Buying and selling ISP’s
>
> That can be anything.  There is no connection between revenue and
> earnings.  You can have $2M in revenue  but -$5M in income if you burned
> cash to generate sales.
>
> Sent from my iPhone
>
>
>
> On Aug 22, 2020, at 7:35 PM, Mike Hammett  wrote:
>
> 
>
> Right, but what I'm asking is that if 5x EDIBTA = Y, then what was Y /
> annual revenue?
>
>
>
> -
> Mike Hammett
> Intelligent Computing Solutions <http://www.ics-il.com/>
> <https://www.facebook.com/ICSIL>
> <https://plus.google.com/+IntelligentComputingSolutionsDeKalb>
> <https://www.linkedin.com/company/intelligent-computing-solutions>
> <https://twitter.com/ICSIL>
> Midwest Internet Exchange <http://www.midwest-ix.com/>
> <https://www.facebook.com/mdwestix>
> <https://www.linkedin.com/company/midwest-internet-exchange>
> <https://twitter.com/mdwestix>
> The Brothers WISP <http://www.thebrotherswisp.com/>
> <https://www.facebook.com/thebrotherswisp>
>
>
> <https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg>
> --
>
> *From: *"Chuck McCown" 
> *To: *"AnimalFarm Microwave Users Group" 
> *Sent: *Saturday, August 22, 2020 10:01:44 AM
> *Subject: *Re: [AFMUG] Buying and sel

Re: [AFMUG] Buying and selling ISP’s

[chuck]

The only thing about an ESOP that can make things difficult is the valuation of 
the ownership percentage.  I have seen this also in many privately held 
corporations.  A family member or employee with equity wants to leave.  They 
want to be paid for their stock.  Equity in private companies is worthless 
unless you have controlling interest.

It may make the employee feel rewarded and feel ownership and give them 
bragging rights.  But at some point when someone is unhappy or wanting to move 
on, they seem to think they can just cash in.  It normally does not happen.  
Most privately held companies will not want to buy stock from an employee or 
family member, they would rather spend that money on payroll, bonuses and 
investment in the company, assuming there is an excess of cash.  

I bought out one former employee for $100.  They were PISSED and insulted at 
the offer.  So then I said, “OK, we had a nice year and your tax liability will 
be $10K, so happy to share that tax burden with you”.  They took the offer.  

From: Mark Radabaugh 
Sent: Sunday, August 23, 2020 10:58 AM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

One of the most interesting thing about an ESOP that I didn’t realize is that 
the control of the company does not need to be under the control of the 
employees.   The employees can hold 100% of the stock and still have zero 
control of the company.   Employees don’t directly own the stock, a trust holds 
the stock, and the trustee votes it as directed by the board.   You can set the 
control of the board up any way you want. 

Mark



  On Aug 23, 2020, at 12:48 PM, Mike Meluskey  wrote:


   
  Everyone should listen to Chuck re: all subjects of this entire thread.
  The replace bologna with Spam thread….not so much.

  On 23 Aug 2020, at 12:35, Chuck McCown wrote:

I will never give employees ownership again.  Has a couple really bad 
experiences with that.


Sent from my iPhone


  On Aug 23, 2020, at 6:09 AM, Mark Radabaugh  wrote:


  Or do the compromise between you and Matt - the ESOP where the employees 
end up owning it.  You get nearly the same money out and they eventually get 
the same deal - if they can keep it going and build it.   It’s harder because 
you have to figure out how to both get it to cash out and build at the same 
time. 

  Mark



On Aug 23, 2020, at 7:59 AM, Lewis Bergman  
wrote:

This isn't the feel good kumbaya that might be popular, but I'll say 
this on the subject of division of profits: 
I started my WISP by myself. All of you who started with your own  
checkbook and sweat know what that took. My family sacrificed as I worked 
massive hours. I did everything from accounting to server builds maintenance to 
installs and tech support. All while I was making about 1/3 of minimum wage 
while I did it. We lived off my wife's school teacher salary.

I did that for a pretty short time as we had some early success and 
after a couple of years I started hiring people. By the time I sold I did what 
I wanted when I wanted. The people I hired I paid better than average hourly 
wages for the job and gave bonuses paying them for their work as they did it. I 
never asked any of them to sacrifice like I did nor did they offer.

I took all the risk. If we failed I was the one in financial ruin. They 
could all walk away inconvenienced but fairly unscathed while I was personally 
liable for all company credit cards, vendor payments, carrier contracts, etc.

And of course you can tell where this is going. Myself and the other 
shareholders kept every dime and I sleep fine at night. I worked to help get 
all the best employees jobs. Sure some were angry because they somehow felt 
they deserved something. Those were also the same employees I could have and 
probably should have already gotten rid of as they were problem children. Risk 
and reward. I took the risk, I get the reward. You want rewards? Take the risk. 

I did give a few people bonuses, help setup two in related businesses 
without loans (funneled business their way) but it was not any kind of % or 
really all that significant.I did that because they had been good people first, 
hard workers second, and last but not least, made my life easier when we were 
doing our thing.

I am a capitlist and make no apologies for it.

On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes 
 wrote:

  Now that I think about it - I wonder if my plan of C would be a way 
to reduce income taxes too on the amount received?

  Either by funneling the money through the company and paying the 
employees or having the buying company write a check to each of the key 
employees. 

  I’m not sure which would yield better results for everyone. 

  The way I look at it though - I don’t have hard partners. That often 
leads to problems. But everyone who sticks with 

Re: [AFMUG] Buying and selling ISP’s

[Mark Radabaugh]

One of the most interesting thing about an ESOP that I didn’t realize is that 
the control of the company does not need to be under the control of the 
employees.   The employees can hold 100% of the stock and still have zero 
control of the company.   Employees don’t directly own the stock, a trust holds 
the stock, and the trustee votes it as directed by the board.   You can set the 
control of the board up any way you want.

Mark

> On Aug 23, 2020, at 12:48 PM, Mike Meluskey  wrote:
> 
> 
> Everyone should listen to Chuck re: all subjects of this entire thread.
> The replace bologna with Spam thread….not so much.
> 
>> On 23 Aug 2020, at 12:35, Chuck McCown wrote:
>> 
>> I will never give employees ownership again.  Has a couple really bad 
>> experiences with that.
>> 
>> Sent from my iPhone
>> 
>>> On Aug 23, 2020, at 6:09 AM, Mark Radabaugh  wrote:
>>> 
>> Or do the compromise between you and Matt - the ESOP where the employees 
>> end up owning it.  You get nearly the same money out and they eventually get 
>> the same deal - if they can keep it going and build it.   It’s harder 
>> because you have to figure out how to both get it to cash out and build at 
>> the same time.
>> 
>> Mark
>> 
>>> On Aug 23, 2020, at 7:59 AM, Lewis Bergman  wrote:
>>> 
>>> This isn't the feel good kumbaya that might be popular, but I'll say this 
>>> on the subject of division of profits:
>>> I started my WISP by myself. All of you who started with your own  
>>> checkbook and sweat know what that took. My family sacrificed as I worked 
>>> massive hours. I did everything from accounting to server builds 
>>> maintenance to installs and tech support. All while I was making about 1/3 
>>> of minimum wage while I did it. We lived off my wife's school teacher 
>>> salary.
>>> 
>>> I did that for a pretty short time as we had some early success and after a 
>>> couple of years I started hiring people. By the time I sold I did what I 
>>> wanted when I wanted. The people I hired I paid better than average hourly 
>>> wages for the job and gave bonuses paying them for their work as they did 
>>> it. I never asked any of them to sacrifice like I did nor did they offer.
>>> 
>>> I took all the risk. If we failed I was the one in financial ruin. They 
>>> could all walk away inconvenienced but fairly unscathed while I was 
>>> personally liable for all company credit cards, vendor payments, carrier 
>>> contracts, etc.
>>> 
>>> And of course you can tell where this is going. Myself and the other 
>>> shareholders kept every dime and I sleep fine at night. I worked to help 
>>> get all the best employees jobs. Sure some were angry because they somehow 
>>> felt they deserved something. Those were also the same employees I could 
>>> have and probably should have already gotten rid of as they were problem 
>>> children. Risk and reward. I took the risk, I get the reward. You want 
>>> rewards? Take the risk. 
>>> 
>>> I did give a few people bonuses, help setup two in related businesses 
>>> without loans (funneled business their way) but it was not any kind of % or 
>>> really all that significant.I did that because they had been good people 
>>> first, hard workers second, and last but not least, made my life easier 
>>> when we were doing our thing.
>>> 
>>> I am a capitlist and make no apologies for it.
>>> 
 On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes 
  wrote:
 Now that I think about it - I wonder if my plan of C would be a way to 
 reduce income taxes too on the amount received?
 
 Either by funneling the money through the company and paying the employees 
 or having the buying company write a check to each of the key employees. 
 
 I’m not sure which would yield better results for everyone. 
 
 The way I look at it though - I don’t have hard partners. That often leads 
 to problems. But everyone who sticks with the company and especially if 
 they make a career out of it should be compensated nicely - both each year 
 out of proceeds they helped make as well as out of a major sale if it ever 
 happens. 
 
 If anyone here has ever worked for a company where the owner sold and got 
 2 million and you had worked there for 10 years building it up —— well, 
 how did you feel?  Slap in the face. 
 -- 
 AF mailing list
 AF@af.afmug.com
 http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>> 
>>> 
>>> -- 
>>> Lewis Bergman
>>> 325-439-0533 Cell
>>> -- 
>>> AF mailing list
>>> AF@af.afmug.com
>>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>> 
>> -- 
>> AF mailing list
>> AF@af.afmug.com
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Mike Meluskey]

Everyone should listen to Chuck re: all subjects of this entire thread.
The replace bologna with Spam thread….not so much.

On 23 Aug 2020, at 12:35, Chuck McCown wrote:

I will never give employees ownership again.  Has a couple really bad 
experiences with that.


Sent from my iPhone


On Aug 23, 2020, at 6:09 AM, Mark Radabaugh  wrote:

Or do the compromise between you and Matt - the ESOP where the 
employees end up owning it.  You get nearly the same money out and 
they eventually get the same deal - if they can keep it going and 
build it.   It’s harder because you have to figure out how to both 
get it to cash out and build at the same time.


Mark

On Aug 23, 2020, at 7:59 AM, Lewis Bergman  
wrote:


This isn't the feel good kumbaya that might be popular, but I'll say 
this on the subject of division of profits:
I started my WISP by myself. All of you who started with your own  
checkbook and sweat know what that took. My family sacrificed as I 
worked massive hours. I did everything from accounting to server 
builds maintenance to installs and tech support. All while I was 
making about 1/3 of minimum wage while I did it. We lived off my 
wife's school teacher salary.


I did that for a pretty short time as we had some early success and 
after a couple of years I started hiring people. By the time I sold 
I did what I wanted when I wanted. The people I hired I paid better 
than average hourly wages for the job and gave bonuses paying them 
for their work as they did it. I never asked any of them to 
sacrifice like I did nor did they offer.


I took all the risk. If we failed I was the one in financial ruin. 
They could all walk away inconvenienced but fairly unscathed while I 
was personally liable for all company credit cards, vendor payments, 
carrier contracts, etc.


And of course you can tell where this is going. Myself and the other 
shareholders kept every dime and I sleep fine at night. I worked to 
help get all the best employees jobs. Sure some were angry because 
they somehow felt they deserved something. Those were also the same 
employees I could have and probably should have already gotten rid 
of as they were problem children. Risk and reward. I took the risk, 
I get the reward. You want rewards? Take the risk.


I did give a few people bonuses, help setup two in related 
businesses without loans (funneled business their way) but it was 
not any kind of % or really all that significant.I did that because 
they had been good people first, hard workers second, and last but 
not least, made my life easier when we were doing our thing.


I am a capitlist and make no apologies for it.

On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes 
 wrote:
Now that I think about it - I wonder if my plan of C would be a way 
to reduce income taxes too on the amount received?


Either by funneling the money through the company and paying the 
employees or having the buying company write a check to each of the 
key employees.


I’m not sure which would yield better results for everyone.

The way I look at it though - I don’t have hard partners. That 
often leads to problems. But everyone who sticks with the company 
and especially if they make a career out of it should be 
compensated nicely - both each year out of proceeds they helped 
make as well as out of a major sale if it ever happens.


If anyone here has ever worked for a company where the owner sold 
and got 2 million and you had worked there for 10 years building it 
up —— well, how did you feel?  Slap in the face.

--
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--
Lewis Bergman
325-439-0533 Cell
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Re: [AFMUG] Buying and selling ISP’s

[Chuck McCown]

If they put skin in the game.  Big no to gifting equity.  

Sent from my iPhone

> On Aug 23, 2020, at 7:45 AM, Lewis Bergman  wrote:
> 
> 
> ESOP isn't a compromise. It is a group of employees willing to risk what they 
> have for what they want. I would rather sell to e employee's than anyone else.
> 
>> On Sun, Aug 23, 2020 at 7:09 AM Mark Radabaugh  wrote:
>> Or do the compromise between you and Matt - the ESOP where the employees end 
>> up owning it.  You get nearly the same money out and they eventually get the 
>> same deal - if they can keep it going and build it.   It’s harder because 
>> you have to figure out how to both get it to cash out and build at the same 
>> time.
>> 
>> Mark
>> 
>>> On Aug 23, 2020, at 7:59 AM, Lewis Bergman  wrote:
>>> 
>>> This isn't the feel good kumbaya that might be popular, but I'll say this 
>>> on the subject of division of profits:
>>> I started my WISP by myself. All of you who started with your own  
>>> checkbook and sweat know what that took. My family sacrificed as I worked 
>>> massive hours. I did everything from accounting to server builds 
>>> maintenance to installs and tech support. All while I was making about 1/3 
>>> of minimum wage while I did it. We lived off my wife's school teacher 
>>> salary.
>>> 
>>> I did that for a pretty short time as we had some early success and after a 
>>> couple of years I started hiring people. By the time I sold I did what I 
>>> wanted when I wanted. The people I hired I paid better than average hourly 
>>> wages for the job and gave bonuses paying them for their work as they did 
>>> it. I never asked any of them to sacrifice like I did nor did they offer.
>>> 
>>> I took all the risk. If we failed I was the one in financial ruin. They 
>>> could all walk away inconvenienced but fairly unscathed while I was 
>>> personally liable for all company credit cards, vendor payments, carrier 
>>> contracts, etc.
>>> 
>>> And of course you can tell where this is going. Myself and the other 
>>> shareholders kept every dime and I sleep fine at night. I worked to help 
>>> get all the best employees jobs. Sure some were angry because they somehow 
>>> felt they deserved something. Those were also the same employees I could 
>>> have and probably should have already gotten rid of as they were problem 
>>> children. Risk and reward. I took the risk, I get the reward. You want 
>>> rewards? Take the risk. 
>>> 
>>> I did give a few people bonuses, help setup two in related businesses 
>>> without loans (funneled business their way) but it was not any kind of % or 
>>> really all that significant.I did that because they had been good people 
>>> first, hard workers second, and last but not least, made my life easier 
>>> when we were doing our thing.
>>> 
>>> I am a capitlist and make no apologies for it.
>>> 
 On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes 
  wrote:
 Now that I think about it - I wonder if my plan of C would be a way to 
 reduce income taxes too on the amount received?
 
 Either by funneling the money through the company and paying the employees 
 or having the buying company write a check to each of the key employees. 
 
 I’m not sure which would yield better results for everyone. 
 
 The way I look at it though - I don’t have hard partners. That often leads 
 to problems. But everyone who sticks with the company and especially if 
 they make a career out of it should be compensated nicely - both each year 
 out of proceeds they helped make as well as out of a major sale if it ever 
 happens. 
 
 If anyone here has ever worked for a company where the owner sold and got 
 2 million and you had worked there for 10 years building it up —— well, 
 how did you feel?  Slap in the face. 
 -- 
 AF mailing list
 AF@af.afmug.com
 http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>> 
>>> 
>>> -- 
>>> Lewis Bergman
>>> 325-439-0533 Cell
>>> -- 
>>> AF mailing list
>>> AF@af.afmug.com
>>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>> 
>> -- 
>> AF mailing list
>> AF@af.afmug.com
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> 
> -- 
> Lewis Bergman
> 325-439-0533 Cell
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
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Re: [AFMUG] Buying and selling ISP’s

[Chuck McCown]

I do profit sharing when there are profits that can be shared.  Just not equity 
sharing.

Sent from my iPhone

> On Aug 23, 2020, at 6:22 AM, Matt Hoppes  
> wrote:
> 
> 
> Lewis,
> It’s your business and you can do what you want to with it and I won’t judge 
> anyone for that.
> 
> We do do profit sharing at the end of the year.
> 
> I guess it’s just a different cultural approach to business, while it’s true 
> I do have all the risk, we wouldn’t be anywhere even close to where we are 
> today if it weren’t for the dedicated employees and that I have. Yes some of 
> them are high maintenance, but they bring talents and ability to the company 
> that has kept it moving forward.
> 
>>> On Aug 23, 2020, at 8:09 AM, Mark Radabaugh  wrote:
>>> 
>> Or do the compromise between you and Matt - the ESOP where the employees 
>> end up owning it.  You get nearly the same money out and they eventually get 
>> the same deal - if they can keep it going and build it.   It’s harder 
>> because you have to figure out how to both get it to cash out and build at 
>> the same time.
>> 
>> Mark
>> 
>>> On Aug 23, 2020, at 7:59 AM, Lewis Bergman  wrote:
>>> 
>>> This isn't the feel good kumbaya that might be popular, but I'll say this 
>>> on the subject of division of profits:
>>> I started my WISP by myself. All of you who started with your own  
>>> checkbook and sweat know what that took. My family sacrificed as I worked 
>>> massive hours. I did everything from accounting to server builds 
>>> maintenance to installs and tech support. All while I was making about 1/3 
>>> of minimum wage while I did it. We lived off my wife's school teacher 
>>> salary.
>>> 
>>> I did that for a pretty short time as we had some early success and after a 
>>> couple of years I started hiring people. By the time I sold I did what I 
>>> wanted when I wanted. The people I hired I paid better than average hourly 
>>> wages for the job and gave bonuses paying them for their work as they did 
>>> it. I never asked any of them to sacrifice like I did nor did they offer.
>>> 
>>> I took all the risk. If we failed I was the one in financial ruin. They 
>>> could all walk away inconvenienced but fairly unscathed while I was 
>>> personally liable for all company credit cards, vendor payments, carrier 
>>> contracts, etc.
>>> 
>>> And of course you can tell where this is going. Myself and the other 
>>> shareholders kept every dime and I sleep fine at night. I worked to help 
>>> get all the best employees jobs. Sure some were angry because they somehow 
>>> felt they deserved something. Those were also the same employees I could 
>>> have and probably should have already gotten rid of as they were problem 
>>> children. Risk and reward. I took the risk, I get the reward. You want 
>>> rewards? Take the risk. 
>>> 
>>> I did give a few people bonuses, help setup two in related businesses 
>>> without loans (funneled business their way) but it was not any kind of % or 
>>> really all that significant.I did that because they had been good people 
>>> first, hard workers second, and last but not least, made my life easier 
>>> when we were doing our thing.
>>> 
>>> I am a capitlist and make no apologies for it.
>>> 
 On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes 
  wrote:
 Now that I think about it - I wonder if my plan of C would be a way to 
 reduce income taxes too on the amount received?
 
 Either by funneling the money through the company and paying the employees 
 or having the buying company write a check to each of the key employees. 
 
 I’m not sure which would yield better results for everyone. 
 
 The way I look at it though - I don’t have hard partners. That often leads 
 to problems. But everyone who sticks with the company and especially if 
 they make a career out of it should be compensated nicely - both each year 
 out of proceeds they helped make as well as out of a major sale if it ever 
 happens. 
 
 If anyone here has ever worked for a company where the owner sold and got 
 2 million and you had worked there for 10 years building it up —— well, 
 how did you feel?  Slap in the face. 
 -- 
 AF mailing list
 AF@af.afmug.com
 http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>> 
>>> 
>>> -- 
>>> Lewis Bergman
>>> 325-439-0533 Cell
>>> -- 
>>> AF mailing list
>>> AF@af.afmug.com
>>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>> 
>> -- 
>> AF mailing list
>> AF@af.afmug.com
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
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Re: [AFMUG] Buying and selling ISP’s

[Chuck McCown]

I will never give employees ownership again.  Has a couple really bad 
experiences with that.

Sent from my iPhone

> On Aug 23, 2020, at 6:09 AM, Mark Radabaugh  wrote:
> 
> Or do the compromise between you and Matt - the ESOP where the employees end 
> up owning it.  You get nearly the same money out and they eventually get the 
> same deal - if they can keep it going and build it.   It’s harder because you 
> have to figure out how to both get it to cash out and build at the same time.
> 
> Mark
> 
>> On Aug 23, 2020, at 7:59 AM, Lewis Bergman  wrote:
>> 
>> This isn't the feel good kumbaya that might be popular, but I'll say this on 
>> the subject of division of profits:
>> I started my WISP by myself. All of you who started with your own  checkbook 
>> and sweat know what that took. My family sacrificed as I worked massive 
>> hours. I did everything from accounting to server builds maintenance to 
>> installs and tech support. All while I was making about 1/3 of minimum wage 
>> while I did it. We lived off my wife's school teacher salary.
>> 
>> I did that for a pretty short time as we had some early success and after a 
>> couple of years I started hiring people. By the time I sold I did what I 
>> wanted when I wanted. The people I hired I paid better than average hourly 
>> wages for the job and gave bonuses paying them for their work as they did 
>> it. I never asked any of them to sacrifice like I did nor did they offer.
>> 
>> I took all the risk. If we failed I was the one in financial ruin. They 
>> could all walk away inconvenienced but fairly unscathed while I was 
>> personally liable for all company credit cards, vendor payments, carrier 
>> contracts, etc.
>> 
>> And of course you can tell where this is going. Myself and the other 
>> shareholders kept every dime and I sleep fine at night. I worked to help get 
>> all the best employees jobs. Sure some were angry because they somehow felt 
>> they deserved something. Those were also the same employees I could have and 
>> probably should have already gotten rid of as they were problem children. 
>> Risk and reward. I took the risk, I get the reward. You want rewards? Take 
>> the risk. 
>> 
>> I did give a few people bonuses, help setup two in related businesses 
>> without loans (funneled business their way) but it was not any kind of % or 
>> really all that significant.I did that because they had been good people 
>> first, hard workers second, and last but not least, made my life easier when 
>> we were doing our thing.
>> 
>> I am a capitlist and make no apologies for it.
>> 
>>> On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes 
>>>  wrote:
>>> Now that I think about it - I wonder if my plan of C would be a way to 
>>> reduce income taxes too on the amount received?
>>> 
>>> Either by funneling the money through the company and paying the employees 
>>> or having the buying company write a check to each of the key employees. 
>>> 
>>> I’m not sure which would yield better results for everyone. 
>>> 
>>> The way I look at it though - I don’t have hard partners. That often leads 
>>> to problems. But everyone who sticks with the company and especially if 
>>> they make a career out of it should be compensated nicely - both each year 
>>> out of proceeds they helped make as well as out of a major sale if it ever 
>>> happens. 
>>> 
>>> If anyone here has ever worked for a company where the owner sold and got 2 
>>> million and you had worked there for 10 years building it up —— well, how 
>>> did you feel?  Slap in the face. 
>>> -- 
>>> AF mailing list
>>> AF@af.afmug.com
>>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>> 
>> 
>> -- 
>> Lewis Bergman
>> 325-439-0533 Cell
>> -- 
>> AF mailing list
>> AF@af.afmug.com
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
-- 
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Re: [AFMUG] Buying and selling ISP’s

[Mark Radabaugh]

I meant ‘compromise’ in the sense that it rewards both the original owner and 
the employees., not in terms of the value out of the business.

Mark

> On Aug 23, 2020, at 9:45 AM, Lewis Bergman  wrote:
> 
> 
> ESOP isn't a compromise. It is a group of employees willing to risk what they 
> have for what they want. I would rather sell to e employee's than anyone else.
> 
>> On Sun, Aug 23, 2020 at 7:09 AM Mark Radabaugh  wrote:
>> Or do the compromise between you and Matt - the ESOP where the employees end 
>> up owning it.  You get nearly the same money out and they eventually get the 
>> same deal - if they can keep it going and build it.   It’s harder because 
>> you have to figure out how to both get it to cash out and build at the same 
>> time.
>> 
>> Mark
>> 
>>> On Aug 23, 2020, at 7:59 AM, Lewis Bergman  wrote:
>>> 
>>> This isn't the feel good kumbaya that might be popular, but I'll say this 
>>> on the subject of division of profits:
>>> I started my WISP by myself. All of you who started with your own  
>>> checkbook and sweat know what that took. My family sacrificed as I worked 
>>> massive hours. I did everything from accounting to server builds 
>>> maintenance to installs and tech support. All while I was making about 1/3 
>>> of minimum wage while I did it. We lived off my wife's school teacher 
>>> salary.
>>> 
>>> I did that for a pretty short time as we had some early success and after a 
>>> couple of years I started hiring people. By the time I sold I did what I 
>>> wanted when I wanted. The people I hired I paid better than average hourly 
>>> wages for the job and gave bonuses paying them for their work as they did 
>>> it. I never asked any of them to sacrifice like I did nor did they offer.
>>> 
>>> I took all the risk. If we failed I was the one in financial ruin. They 
>>> could all walk away inconvenienced but fairly unscathed while I was 
>>> personally liable for all company credit cards, vendor payments, carrier 
>>> contracts, etc.
>>> 
>>> And of course you can tell where this is going. Myself and the other 
>>> shareholders kept every dime and I sleep fine at night. I worked to help 
>>> get all the best employees jobs. Sure some were angry because they somehow 
>>> felt they deserved something. Those were also the same employees I could 
>>> have and probably should have already gotten rid of as they were problem 
>>> children. Risk and reward. I took the risk, I get the reward. You want 
>>> rewards? Take the risk. 
>>> 
>>> I did give a few people bonuses, help setup two in related businesses 
>>> without loans (funneled business their way) but it was not any kind of % or 
>>> really all that significant.I did that because they had been good people 
>>> first, hard workers second, and last but not least, made my life easier 
>>> when we were doing our thing.
>>> 
>>> I am a capitlist and make no apologies for it.
>>> 
 On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes 
  wrote:
 Now that I think about it - I wonder if my plan of C would be a way to 
 reduce income taxes too on the amount received?
 
 Either by funneling the money through the company and paying the employees 
 or having the buying company write a check to each of the key employees. 
 
 I’m not sure which would yield better results for everyone. 
 
 The way I look at it though - I don’t have hard partners. That often leads 
 to problems. But everyone who sticks with the company and especially if 
 they make a career out of it should be compensated nicely - both each year 
 out of proceeds they helped make as well as out of a major sale if it ever 
 happens. 
 
 If anyone here has ever worked for a company where the owner sold and got 
 2 million and you had worked there for 10 years building it up —— well, 
 how did you feel?  Slap in the face. 
 -- 
 AF mailing list
 AF@af.afmug.com
 http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>> 
>>> 
>>> -- 
>>> Lewis Bergman
>>> 325-439-0533 Cell
>>> -- 
>>> AF mailing list
>>> AF@af.afmug.com
>>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>> 
>> -- 
>> AF mailing list
>> AF@af.afmug.com
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> 
> -- 
> Lewis Bergman
> 325-439-0533 Cell
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
-- 
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AF@af.afmug.com
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Re: [AFMUG] Buying and selling ISP’s

[Jeff Broadwick - Lists]

I have a couple theories about the selling market:

1.  There’s never been more cash floating around our industry.  It provides 
options.  There is also a good chance that smaller WISPs are about to be over 
built with government money...another strong inducement to make your best deal.

2.  As an industry, we are about 20 years old.  If you started the business in 
your 40s or 50s, you might be easy to retire.  If you started it younger, you 
might be ready to cash out and go do something else.

Jeff Broadwick
CTIconnect
312-205-2519 Office
574-220-7826 Cell
jbroadw...@cticonnect.com

> On Aug 23, 2020, at 11:54 AM, Ken Hohhof  wrote:
> 
> 
> I seem to remember this thread started with a post about buying, but there 
> seems to be a lot of interest in selling.  I wonder why.
>  
> Is it because customers are getting on our nerves?  I know they’re getting on 
> mine.  Everyone is stuck in their house doing everything on the Internet and 
> whining about it and waiting until the last minute and then needing stuff 
> right now this minute because we’re 
> streaming/gaming/Zooming/eLearning/teleworking here.  Plus doing construction 
> on our house and the contractors are here right now taking your dish off the 
> roof or putting siding nails through your cable.  Or they’re buying/selling 
> houses because interest rates are like zero or to move away from the virus or 
> to a different school district.
>  
>  
> From: AF  On Behalf Of Mike Hammett
> Sent: Sunday, August 23, 2020 10:05 AM
> To: AnimalFarm Microwave Users Group 
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> I know it *CAN* be anything.
>  
> I'm asking what it is for successful, arms-length, nothing special 
> transactions. I do expect there to be a range.
>  
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Saturday, August 22, 2020 10:28:58 PM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> That can be anything.  There is no connection between revenue and earnings.  
> You can have $2M in revenue  but -$5M in income if you burned cash to 
> generate sales.
> 
> Sent from my iPhone
>  
> On Aug 22, 2020, at 7:35 PM, Mike Hammett  wrote:
> 
> 
> Right, but what I'm asking is that if 5x EDIBTA = Y, then what was Y / annual 
> revenue?
> 
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Saturday, August 22, 2020 10:01:44 AM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> Whatever 5x your earnings are.  Not sales or revenue or gross profit but 
> bottom line earnings on your income statement/ pl. Your taxable income.
> 
> Sent from my iPhone
>  
> On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:
> 
> 
> What does the revenue multiplier end up being, though?
> 
> 5x EBIDTA / revenue gets you what, in purchases that have been made?
> 
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Friday, August 21, 2020 8:20:47 PM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> 5 x ebidta
> Revenue multiples are of no value.
> 
> Sent from my iPhone
>  
> On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:
> 
> 
> 1x annual revenue and hope the customers stay on
>  
> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes 
>  wrote:
> This is the issue I’ve always had when I’ve looked at buying an ISP. It 
> always seems like a lot more money I would have to put out to buy then I 
> could just build and take the customers if something is wrong with the 
> current network.
> 
> 
> 
> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
> 
> > 
> 
> > On 8/20/20 8:13 PM, Steve Jones wrote:
> 
> >> I think you either buy or sell, isp isnt really a flip thing
> 
> > 
> 
> > 
> 
> > There is/was someone in my part of the country buying up ISPs and trying to 
> > package them all together as a flip. My ISP customers tell me it's far 
> > easier to get the flipper's customers to cancel and switch than buy their 
> > company.
> 
> > 
> 
> > -- 
> 
> > AF mailing list
> 
> > AF@af.afmug.com
> 
> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Ken Hohhof]

We went through a couple decades where startup companies would get people to 
work insane hours for not that much money and no employment security in return 
for stock options – a piece of the action if things hit the bigtime.  If it 
worked out, they could be millionaires.  If it didn’t, they worked their asses 
off for nothing.  They went into this willingly, but it was kind of 
exploitative.  There’s also the whole gig economy thing.

 

I suspect we may be entering a period where people are once again appreciative 
of stable employment for a fair salary and benefits.  While profit sharing or 
bonuses are always appreciated, I’m not sure the typical employee expects to 
share in the profits if the owners sell the company, especially if they were 
well treated and compensated while they worked there.  Unfortunately, new 
owners often let some or all of the employees go.  Even where the seller gets a 
commitment to keep the employees for a minimum period like 6 months or a year, 
most of them seem to move on by then.  The exception seems to be when the buyer 
is a similar employer, like a family owned business sells to another family 
owned business.

 

I would hope if anyone has their employees sign some kind of no compete clause 
that would prevent them from going to work for a competing WISP in the area, 
that they are released from those agreements as part of the sale.  Not saying 
they should be allowed to take intellectual property or customer lists with 
them to a competitor.

 

 

From: AF  On Behalf Of Tyson Burris
Sent: Sunday, August 23, 2020 10:39 AM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

Steve-

 

We have one individual on our payroll, part time.  He does consulting work for 
us and others.  Assuming he hits all the goals we push him to do, and they are 
done correctly, he would get some money out of a sell of our company.  

 

No one else though.  This is a special circumstance.

 

Tyson Burris, President 
Internet Communications Inc. 
739 Commerce Dr. 
Franklin, IN 46131 
  
Office # 317-738-0320 
Cell/Direct # 317-412-1540 
Online: www.surfici.net 

 



What can ICI do for you? 


Broadband Wireless - PtP/PtMP Solutions - Mesh Wifi/Hotzones - IP Cameras - 
Fiber - Towers - Infrastructure. 
  
CONFIDENTIALITY NOTICE: This e-mail is intended for the 
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unauthorized organizations or individuals is strictly 
prohibited. 

 

From: AF mailto:af-boun...@af.afmug.com> > On Behalf 
Of Steve Jones
Sent: Sunday, August 23, 2020 8:50 AM
To: AnimalFarm Microwave Users Group mailto:af@af.afmug.com> >
Subject: Re: [AFMUG] Buying and selling ISP’s

 

Is that a common thing in businesses? Employees getting a cut of a sale? I 
could see the purchaser giving a retention or severance, but I d9nt see how an 
employee would be entitled to anything more than a handshake or kick in the 
pants

On Sun, Aug 23, 2020, 7:22 AM Matt Hoppes mailto:mattli...@rivervalleyinternet.net> > wrote:

Lewis,

It’s your business and you can do what you want to with it and I won’t judge 
anyone for that.

 

We do do profit sharing at the end of the year.

 

I guess it’s just a different cultural approach to business, while it’s true I 
do have all the risk, we wouldn’t be anywhere even close to where we are today 
if it weren’t for the dedicated employees and that I have. Yes some of them are 
high maintenance, but they bring talents and ability to the company that has 
kept it moving forward.

 

On Aug 23, 2020, at 8:09 AM, Mark Radabaugh mailto:m...@amplex.net> > wrote:

Or do the compromise between you and Matt - the ESOP where the employees end 
up owning it.  You get nearly the same money out and they eventually get the 
same deal - if they can keep it going and build it.   It’s harder because you 
have to figure out how to both get it to cash out and build at the same time.

 

Mark

 

On Aug 23, 2020, at 7:59 AM, Lewis Bergman mailto:lewis.berg...@gmail.com> > wrote:

 

This isn't the feel good kumbaya that might be popular, but I'll say this on 
the subject of division of profits:

I started my WISP by myself. All of you who started with your own  checkbook 
and sweat know what that took. My family sacrificed as I worked massive hours. 
I did everything from accounting to server builds maintenance to installs and 
tech support. All while I was making about 1/3 of minimum wage while I did it. 
We lived off my wife's school teacher salary.

 

I did that for a pretty short time as we had some early success and after a 
couple of years I started hiring people. By the time I sold I did what I wanted 
when I wanted. The people I hired I paid better than average hourly wages for 
the job and gave bonuses paying them for their work as they did it. I never 

Re: [AFMUG] Buying and selling ISP’s

[Matt Hoppes]

I’ve purchased almost everything around me at this point. 

What’s left?  Sell. Or build - which is what we’re doing now. 

> On Aug 23, 2020, at 11:54 AM, Ken Hohhof  wrote:
> 
> 
> I seem to remember this thread started with a post about buying, but there 
> seems to be a lot of interest in selling.  I wonder why.
>  
> Is it because customers are getting on our nerves?  I know they’re getting on 
> mine.  Everyone is stuck in their house doing everything on the Internet and 
> whining about it and waiting until the last minute and then needing stuff 
> right now this minute because we’re 
> streaming/gaming/Zooming/eLearning/teleworking here.  Plus doing construction 
> on our house and the contractors are here right now taking your dish off the 
> roof or putting siding nails through your cable.  Or they’re buying/selling 
> houses because interest rates are like zero or to move away from the virus or 
> to a different school district.
>  
>  
> From: AF  On Behalf Of Mike Hammett
> Sent: Sunday, August 23, 2020 10:05 AM
> To: AnimalFarm Microwave Users Group 
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> I know it *CAN* be anything.
>  
> I'm asking what it is for successful, arms-length, nothing special 
> transactions. I do expect there to be a range.
>  
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Saturday, August 22, 2020 10:28:58 PM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> That can be anything.  There is no connection between revenue and earnings.  
> You can have $2M in revenue  but -$5M in income if you burned cash to 
> generate sales.
> 
> Sent from my iPhone
>  
> On Aug 22, 2020, at 7:35 PM, Mike Hammett  wrote:
> 
> 
> Right, but what I'm asking is that if 5x EDIBTA = Y, then what was Y / annual 
> revenue?
> 
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Saturday, August 22, 2020 10:01:44 AM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> Whatever 5x your earnings are.  Not sales or revenue or gross profit but 
> bottom line earnings on your income statement/ pl. Your taxable income.
> 
> Sent from my iPhone
>  
> On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:
> 
> 
> What does the revenue multiplier end up being, though?
> 
> 5x EBIDTA / revenue gets you what, in purchases that have been made?
> 
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Friday, August 21, 2020 8:20:47 PM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> 5 x ebidta
> Revenue multiples are of no value.
> 
> Sent from my iPhone
>  
> On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:
> 
> 
> 1x annual revenue and hope the customers stay on
>  
> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes 
>  wrote:
> This is the issue I’ve always had when I’ve looked at buying an ISP. It 
> always seems like a lot more money I would have to put out to buy then I 
> could just build and take the customers if something is wrong with the 
> current network.
> 
> 
> 
> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
> 
> > 
> 
> > On 8/20/20 8:13 PM, Steve Jones wrote:
> 
> >> I think you either buy or sell, isp isnt really a flip thing
> 
> > 
> 
> > 
> 
> > There is/was someone in my part of the country buying up ISPs and trying to 
> > package them all together as a flip. My ISP customers tell me it's far 
> > easier to get the flipper's customers to cancel and switch than buy their 
> > company.
> 
> > 
> 
> > -- 
> 
> > AF mailing list
> 
> > AF@af.afmug.com
> 
> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> 
> 
> -- 
> 
> AF mailing list
> 
> AF@af.afmug.com
> 
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>  
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>  
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>  
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Ken Hohhof]

I seem to remember this thread started with a post about buying, but there 
seems to be a lot of interest in selling.  I wonder why.

 

Is it because customers are getting on our nerves?  I know they’re getting on 
mine.  Everyone is stuck in their house doing everything on the Internet and 
whining about it and waiting until the last minute and then needing stuff right 
now this minute because we’re streaming/gaming/Zooming/eLearning/teleworking 
here.  Plus doing construction on our house and the contractors are here right 
now taking your dish off the roof or putting siding nails through your cable.  
Or they’re buying/selling houses because interest rates are like zero or to 
move away from the virus or to a different school district.

 

 

From: AF  On Behalf Of Mike Hammett
Sent: Sunday, August 23, 2020 10:05 AM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

I know it *CAN* be anything.

 

I'm asking what it is for successful, arms-length, nothing special 
transactions. I do expect there to be a range.

 



-
Mike Hammett
 <http://www.ics-il.com/> Intelligent Computing Solutions
 <https://www.facebook.com/ICSIL>  
<https://plus.google.com/+IntelligentComputingSolutionsDeKalb>  
<https://www.linkedin.com/company/intelligent-computing-solutions>  
<https://twitter.com/ICSIL> 
 <http://www.midwest-ix.com/> Midwest Internet Exchange
 <https://www.facebook.com/mdwestix>  
<https://www.linkedin.com/company/midwest-internet-exchange>  
<https://twitter.com/mdwestix> 
 <http://www.thebrotherswisp.com/> The Brothers WISP
 <https://www.facebook.com/thebrotherswisp>  
<https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg> 




  _  

From: "Chuck McCown" mailto:ch...@wbmfg.com> >
To: "AnimalFarm Microwave Users Group" mailto:af@af.afmug.com> >
Sent: Saturday, August 22, 2020 10:28:58 PM
Subject: Re: [AFMUG] Buying and selling ISP’s

That can be anything.  There is no connection between revenue and earnings.  
You can have $2M in revenue  but -$5M in income if you burned cash to generate 
sales.

Sent from my iPhone

 

On Aug 22, 2020, at 7:35 PM, Mike Hammett mailto:af...@ics-il.net> > wrote:



Right, but what I'm asking is that if 5x EDIBTA = Y, then what was Y / annual 
revenue?



-
Mike Hammett
 <http://www.ics-il.com/> Intelligent Computing Solutions
 <https://www.facebook.com/ICSIL>  
<https://plus.google.com/+IntelligentComputingSolutionsDeKalb>  
<https://www.linkedin.com/company/intelligent-computing-solutions>  
<https://twitter.com/ICSIL> 
 <http://www.midwest-ix.com/> Midwest Internet Exchange
 <https://www.facebook.com/mdwestix>  
<https://www.linkedin.com/company/midwest-internet-exchange>  
<https://twitter.com/mdwestix> 
 <http://www.thebrotherswisp.com/> The Brothers WISP
 <https://www.facebook.com/thebrotherswisp>  
<https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg> 





  _____  


From: "Chuck McCown" mailto:ch...@wbmfg.com> >
To: "AnimalFarm Microwave Users Group" mailto:af@af.afmug.com> >
Sent: Saturday, August 22, 2020 10:01:44 AM
Subject: Re: [AFMUG] Buying and selling ISP’s

Whatever 5x your earnings are.  Not sales or revenue or gross profit but bottom 
line earnings on your income statement/ pl. Your taxable income.

Sent from my iPhone

 

On Aug 22, 2020, at 8:16 AM, Mike Hammett mailto:af...@ics-il.net> > wrote:



What does the revenue multiplier end up being, though?

5x EBIDTA / revenue gets you what, in purchases that have been made?



-
Mike Hammett
 <http://www.ics-il.com/> Intelligent Computing Solutions
 <https://www.facebook.com/ICSIL>  
<https://plus.google.com/+IntelligentComputingSolutionsDeKalb>  
<https://www.linkedin.com/company/intelligent-computing-solutions>  
<https://twitter.com/ICSIL> 
 <http://www.midwest-ix.com/> Midwest Internet Exchange
 <https://www.facebook.com/mdwestix>  
<https://www.linkedin.com/company/midwest-internet-exchange>  
<https://twitter.com/mdwestix> 
 <http://www.thebrotherswisp.com/> The Brothers WISP
 <https://www.facebook.com/thebrotherswisp>  
<https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg> 





  _  


From: "Chuck McCown" mailto:ch...@wbmfg.com> >
To: "AnimalFarm Microwave Users Group" mailto:af@af.afmug.com> >
Sent: Friday, August 21, 2020 8:20:47 PM
Subject: Re: [AFMUG] Buying and selling ISP’s

5 x ebidta

Revenue multiples are of no value.

Sent from my iPhone

 

On Aug 21, 2020, at 5:30 PM, cjwstudios mailto:cjwstud...@gmail.com> > wrote:



1x annual revenue and hope the customers stay on

 

On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes mailto:mattli...@rivervalleyinternet.net> > wrote:

Th

Re: [AFMUG] Buying and selling ISP’s

[Tyson Burris]

Steve-

We have one individual on our payroll, part time.  He does consulting work for 
us and others.  Assuming he hits all the goals we push him to do, and they are 
done correctly, he would get some money out of a sell of our company.

No one else though.  This is a special circumstance.

Tyson Burris, President
Internet Communications Inc.
739 Commerce Dr.
Franklin, IN 46131

Office # 317-738-0320
Cell/Direct # 317-412-1540
Online: www.surfici.net

[ICI]
What can ICI do for you?

Broadband Wireless - PtP/PtMP Solutions - Mesh Wifi/Hotzones - IP Cameras - 
Fiber - Towers - Infrastructure.

CONFIDENTIALITY NOTICE: This e-mail is intended for the
addressee shown. It contains information that is
confidential and protected from disclosure. Any review,
dissemination or use of this transmission or its contents by
unauthorized organizations or individuals is strictly
prohibited.

From: AF  On Behalf Of Steve Jones
Sent: Sunday, August 23, 2020 8:50 AM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

Is that a common thing in businesses? Employees getting a cut of a sale? I 
could see the purchaser giving a retention or severance, but I d9nt see how an 
employee would be entitled to anything more than a handshake or kick in the 
pants
On Sun, Aug 23, 2020, 7:22 AM Matt Hoppes 
mailto:mattli...@rivervalleyinternet.net>> 
wrote:
Lewis,
It’s your business and you can do what you want to with it and I won’t judge 
anyone for that.

We do do profit sharing at the end of the year.

I guess it’s just a different cultural approach to business, while it’s true I 
do have all the risk, we wouldn’t be anywhere even close to where we are today 
if it weren’t for the dedicated employees and that I have. Yes some of them are 
high maintenance, but they bring talents and ability to the company that has 
kept it moving forward.


On Aug 23, 2020, at 8:09 AM, Mark Radabaugh 
mailto:m...@amplex.net>> wrote:
Or do the compromise between you and Matt - the ESOP where the employees end 
up owning it.  You get nearly the same money out and they eventually get the 
same deal - if they can keep it going and build it.   It’s harder because you 
have to figure out how to both get it to cash out and build at the same time.

Mark


On Aug 23, 2020, at 7:59 AM, Lewis Bergman 
mailto:lewis.berg...@gmail.com>> wrote:

This isn't the feel good kumbaya that might be popular, but I'll say this on 
the subject of division of profits:
I started my WISP by myself. All of you who started with your own  checkbook 
and sweat know what that took. My family sacrificed as I worked massive hours. 
I did everything from accounting to server builds maintenance to installs and 
tech support. All while I was making about 1/3 of minimum wage while I did it. 
We lived off my wife's school teacher salary.

I did that for a pretty short time as we had some early success and after a 
couple of years I started hiring people. By the time I sold I did what I wanted 
when I wanted. The people I hired I paid better than average hourly wages for 
the job and gave bonuses paying them for their work as they did it. I never 
asked any of them to sacrifice like I did nor did they offer.

I took all the risk. If we failed I was the one in financial ruin. They could 
all walk away inconvenienced but fairly unscathed while I was personally liable 
for all company credit cards, vendor payments, carrier contracts, etc.

And of course you can tell where this is going. Myself and the other 
shareholders kept every dime and I sleep fine at night. I worked to help get 
all the best employees jobs. Sure some were angry because they somehow felt 
they deserved something. Those were also the same employees I could have and 
probably should have already gotten rid of as they were problem children. Risk 
and reward. I took the risk, I get the reward. You want rewards? Take the risk.

I did give a few people bonuses, help setup two in related businesses without 
loans (funneled business their way) but it was not any kind of % or really all 
that significant.I did that because they had been good people first, hard 
workers second, and last but not least, made my life easier when we were doing 
our thing.

I am a capitlist and make no apologies for it.

On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes 
mailto:mattli...@rivervalleyinternet.net>> 
wrote:
Now that I think about it - I wonder if my plan of C would be a way to reduce 
income taxes too on the amount received?

Either by funneling the money through the company and paying the employees or 
having the buying company write a check to each of the key employees.

I’m not sure which would yield better results for everyone.

The way I look at it though - I don’t have hard partners. That often leads to 
problems. But everyone who sticks with the company and especially if they make 
a career out of it should be compensated nicely - both each year out of 
proceeds the

Re: [AFMUG] Buying and selling ISP’s

[Mike Hammett]

I know it *CAN* be anything. 


I'm asking what it is for successful, arms-length, nothing special 
transactions. I do expect there to be a range. 





- 
Mike Hammett 
Intelligent Computing Solutions 

Midwest Internet Exchange 

The Brothers WISP 




- Original Message -

From: "Chuck McCown"  
To: "AnimalFarm Microwave Users Group"  
Sent: Saturday, August 22, 2020 10:28:58 PM 
Subject: Re: [AFMUG] Buying and selling ISP’s 

That can be anything. There is no connection between revenue and earnings. You 
can have $2M in revenue but -$5M in income if you burned cash to generate 
sales. 


Sent from my iPhone 



On Aug 22, 2020, at 7:35 PM, Mike Hammett  wrote: 







Right, but what I'm asking is that if 5x EDIBTA = Y, then what was Y / annual 
revenue? 




- 
Mike Hammett 
Intelligent Computing Solutions 

Midwest Internet Exchange 

The Brothers WISP 




- Original Message -

From: "Chuck McCown"  
To: "AnimalFarm Microwave Users Group"  
Sent: Saturday, August 22, 2020 10:01:44 AM 
Subject: Re: [AFMUG] Buying and selling ISP’s 

Whatever 5x your earnings are. Not sales or revenue or gross profit but bottom 
line earnings on your income statement/ pl. Your taxable income. 


Sent from my iPhone 



On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote: 







What does the revenue multiplier end up being, though? 

5x EBIDTA / revenue gets you what, in purchases that have been made? 




- 
Mike Hammett 
Intelligent Computing Solutions 

Midwest Internet Exchange 

The Brothers WISP 




- Original Message -

From: "Chuck McCown"  
To: "AnimalFarm Microwave Users Group"  
Sent: Friday, August 21, 2020 8:20:47 PM 
Subject: Re: [AFMUG] Buying and selling ISP’s 

5 x ebidta 
Revenue multiples are of no value. 


Sent from my iPhone 



On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote: 








1x annual revenue and hope the customers stay on 



On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes < mattli...@rivervalleyinternet.net 
> wrote: 


This is the issue I’ve always had when I’ve looked at buying an ISP. It always 
seems like a lot more money I would have to put out to buy then I could just 
build and take the customers if something is wrong with the current network. 



> On Aug 21, 2020, at 12:43 PM, Seth Mattinen < se...@rollernet.us > wrote: 

> 

> On 8/20/20 8:13 PM, Steve Jones wrote: 

>> I think you either buy or sell, isp isnt really a flip thing 

> 

> 

> There is/was someone in my part of the country buying up ISPs and trying to 
> package them all together as a flip. My ISP customers tell me it's far easier 
> to get the flipper's customers to cancel and switch than buy their company. 

> 

> -- 

> AF mailing list 

> AF@af.afmug.com 

> http://af.afmug.com/mailman/listinfo/af_af.afmug.com 



-- 

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http://af.afmug.com/mailman/listinfo/af_af.afmug.com 



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Re: [AFMUG] Buying and selling ISP’s

[Lewis Bergman]

On the ESOP topic I will say I had a friend that still owns part of an
ESOP. His father started it. He was lucky to have a group of employees that
was eager to buy into the company. Last count I got from him more than 10
people have retired with at least a million dollar buyout. Every ESOP owner
is required to sell their shares when they leave employment no matter the
reason. It is a good company. They still have all the same issues we all
do. Some buy in because they think it is an easy ticket to get paid but not
have to do as much. They find out different. All in all, if you have a very
tight nit core group than can agree on the initial formation docs and have
a well thought out ESOP ByLaws it can be a grand thing in which everyone,
including the original founder, are treated fairly.

If you run a great business with great people, especially if your kids
aren't interested in your business, then I think this is fantastic.

On Sun, Aug 23, 2020 at 8:53 AM Lewis Bergman 
wrote:

> We did what most people would call profit sharing. I didn't view it as
> profit sharing for the simple reason that I always matched 100%, even when
> we didn't make a profit. Same with bonuses. If someone deserved a bonus,
> sometimes that didn't show up in the bottom line but they got it anyway.
>
> I am not making any judgements either way. I don't feel like I owed my
> employees anything because I paid them a great wage and treated them better
> than most other employers I was competing with. Days off, flexible work
> schedules, good pay. Not saying someone who feels they should pay their
> employees on a buyout isn't doing that, just that I know I did.
>
> At any rate, someone asked a question on how to actually get that employee
> payment done in a tax advantage manner. I guess regardless of the formation
> type (C or S) payments to employees are going to be reflected as an expense
> in the year you sell and should offset gains. If it is an asset sale as
> most are there may be a difference in the calculation as capital gains are
> offset by capital losses and salaries aren't in that category.
>
> On Sun, Aug 23, 2020 at 8:04 AM Matt Hoppes <
> mattli...@rivervalleyinternet.net> wrote:
>
>> Is it common?  No
>>
>> Why isn’t it common?  I have no idea.
>>
>> Yes I as the owner took the risk. But X Y and Z employees have been here
>> with me for the past 30 years and kept things running.
>>
>> Shouldn’t I be grateful for what they helped me build?
>>
>> Like I said - I’m not judging anyone who makes a decision one way or the
>> other. But to me it doesn’t seem right to say “thanks for 20 years of
>> dedicated service and helping us make millions, go find another job now”.
>>
>> On Aug 23, 2020, at 8:51 AM, Steve Jones 
>> wrote:
>>
>> 
>> Is that a common thing in businesses? Employees getting a cut of a sale?
>> I could see the purchaser giving a retention or severance, but I d9nt see
>> how an employee would be entitled to anything more than a handshake or kick
>> in the pants
>>
>> On Sun, Aug 23, 2020, 7:22 AM Matt Hoppes <
>> mattli...@rivervalleyinternet.net> wrote:
>>
>>> Lewis,
>>> It’s your business and you can do what you want to with it and I won’t
>>> judge anyone for that.
>>>
>>> We do do profit sharing at the end of the year.
>>>
>>> I guess it’s just a different cultural approach to business, while it’s
>>> true I do have all the risk, we wouldn’t be anywhere even close to where we
>>> are today if it weren’t for the dedicated employees and that I have. Yes
>>> some of them are high maintenance, but they bring talents and ability to
>>> the company that has kept it moving forward.
>>>
>>> On Aug 23, 2020, at 8:09 AM, Mark Radabaugh  wrote:
>>>
>>> Or do the compromise between you and Matt - the ESOP where the
>>> employees end up owning it.  You get nearly the same money out and they
>>> eventually get the same deal - if they can keep it going and build it.
>>> It’s harder because you have to figure out how to both get it to cash out
>>> and build at the same time.
>>>
>>> Mark
>>>
>>> On Aug 23, 2020, at 7:59 AM, Lewis Bergman 
>>> wrote:
>>>
>>> This isn't the feel good kumbaya that might be popular, but I'll say
>>> this on the subject of division of profits:
>>> I started my WISP by myself. All of you who started with your own
>>> checkbook and sweat know what that took. My family sacrificed as I worked
>>> massive hours. I did everything from accounting to server builds
>>> maintenance to installs and tech support. All while I was making about 1/3
>>> of minimum wage while I did it. We lived off my wife's school teacher
>>> salary.
>>>
>>> I did that for a pretty short time as we had some early success and
>>> after a couple of years I started hiring people. By the time I sold I did
>>> what I wanted when I wanted. The people I hired I paid better than average
>>> hourly wages for the job and gave bonuses paying them for their work as
>>> they did it. I never asked any of them to sacrifice like I did nor 

Re: [AFMUG] Buying and selling ISP’s

[Lewis Bergman]

We did what most people would call profit sharing. I didn't view it as
profit sharing for the simple reason that I always matched 100%, even when
we didn't make a profit. Same with bonuses. If someone deserved a bonus,
sometimes that didn't show up in the bottom line but they got it anyway.

I am not making any judgements either way. I don't feel like I owed my
employees anything because I paid them a great wage and treated them better
than most other employers I was competing with. Days off, flexible work
schedules, good pay. Not saying someone who feels they should pay their
employees on a buyout isn't doing that, just that I know I did.

At any rate, someone asked a question on how to actually get that employee
payment done in a tax advantage manner. I guess regardless of the formation
type (C or S) payments to employees are going to be reflected as an expense
in the year you sell and should offset gains. If it is an asset sale as
most are there may be a difference in the calculation as capital gains are
offset by capital losses and salaries aren't in that category.

On Sun, Aug 23, 2020 at 8:04 AM Matt Hoppes <
mattli...@rivervalleyinternet.net> wrote:

> Is it common?  No
>
> Why isn’t it common?  I have no idea.
>
> Yes I as the owner took the risk. But X Y and Z employees have been here
> with me for the past 30 years and kept things running.
>
> Shouldn’t I be grateful for what they helped me build?
>
> Like I said - I’m not judging anyone who makes a decision one way or the
> other. But to me it doesn’t seem right to say “thanks for 20 years of
> dedicated service and helping us make millions, go find another job now”.
>
> On Aug 23, 2020, at 8:51 AM, Steve Jones 
> wrote:
>
> 
> Is that a common thing in businesses? Employees getting a cut of a sale? I
> could see the purchaser giving a retention or severance, but I d9nt see how
> an employee would be entitled to anything more than a handshake or kick in
> the pants
>
> On Sun, Aug 23, 2020, 7:22 AM Matt Hoppes <
> mattli...@rivervalleyinternet.net> wrote:
>
>> Lewis,
>> It’s your business and you can do what you want to with it and I won’t
>> judge anyone for that.
>>
>> We do do profit sharing at the end of the year.
>>
>> I guess it’s just a different cultural approach to business, while it’s
>> true I do have all the risk, we wouldn’t be anywhere even close to where we
>> are today if it weren’t for the dedicated employees and that I have. Yes
>> some of them are high maintenance, but they bring talents and ability to
>> the company that has kept it moving forward.
>>
>> On Aug 23, 2020, at 8:09 AM, Mark Radabaugh  wrote:
>>
>> Or do the compromise between you and Matt - the ESOP where the employees
>> end up owning it.  You get nearly the same money out and they eventually
>> get the same deal - if they can keep it going and build it.   It’s harder
>> because you have to figure out how to both get it to cash out and build at
>> the same time.
>>
>> Mark
>>
>> On Aug 23, 2020, at 7:59 AM, Lewis Bergman 
>> wrote:
>>
>> This isn't the feel good kumbaya that might be popular, but I'll say this
>> on the subject of division of profits:
>> I started my WISP by myself. All of you who started with your own
>> checkbook and sweat know what that took. My family sacrificed as I worked
>> massive hours. I did everything from accounting to server builds
>> maintenance to installs and tech support. All while I was making about 1/3
>> of minimum wage while I did it. We lived off my wife's school teacher
>> salary.
>>
>> I did that for a pretty short time as we had some early success and after
>> a couple of years I started hiring people. By the time I sold I did what I
>> wanted when I wanted. The people I hired I paid better than average hourly
>> wages for the job and gave bonuses paying them for their work as they did
>> it. I never asked any of them to sacrifice like I did nor did they offer.
>>
>> I took all the risk. If we failed I was the one in financial ruin. They
>> could all walk away inconvenienced but fairly unscathed while I was
>> personally liable for all company credit cards, vendor payments, carrier
>> contracts, etc.
>>
>> And of course you can tell where this is going. Myself and the other
>> shareholders kept every dime and I sleep fine at night. I worked to help
>> get all the best employees jobs. Sure some were angry because they somehow
>> felt they deserved something. Those were also the same employees I could
>> have and probably should have already gotten rid of as they were problem
>> children. Risk and reward. I took the risk, I get the reward. You want
>> rewards? Take the risk.
>>
>> I did give a few people bonuses, help setup two in related businesses
>> without loans (funneled business their way) but it was not any kind of % or
>> really all that significant.I did that because they had been good people
>> first, hard workers second, and last but not least, made my life easier
>> when we were doing our thing.
>>
>> I am a

Re: [AFMUG] Buying and selling ISP’s

[Lewis Bergman]

ESOP isn't a compromise. It is a group of employees willing to risk what
they have for what they want. I would rather sell to e employee's than
anyone else.

On Sun, Aug 23, 2020 at 7:09 AM Mark Radabaugh  wrote:

> Or do the compromise between you and Matt - the ESOP where the employees
> end up owning it.  You get nearly the same money out and they eventually
> get the same deal - if they can keep it going and build it.   It’s harder
> because you have to figure out how to both get it to cash out and build at
> the same time.
>
> Mark
>
> On Aug 23, 2020, at 7:59 AM, Lewis Bergman 
> wrote:
>
> This isn't the feel good kumbaya that might be popular, but I'll say this
> on the subject of division of profits:
> I started my WISP by myself. All of you who started with your own
> checkbook and sweat know what that took. My family sacrificed as I worked
> massive hours. I did everything from accounting to server builds
> maintenance to installs and tech support. All while I was making about 1/3
> of minimum wage while I did it. We lived off my wife's school teacher
> salary.
>
> I did that for a pretty short time as we had some early success and after
> a couple of years I started hiring people. By the time I sold I did what I
> wanted when I wanted. The people I hired I paid better than average hourly
> wages for the job and gave bonuses paying them for their work as they did
> it. I never asked any of them to sacrifice like I did nor did they offer.
>
> I took all the risk. If we failed I was the one in financial ruin. They
> could all walk away inconvenienced but fairly unscathed while I was
> personally liable for all company credit cards, vendor payments, carrier
> contracts, etc.
>
> And of course you can tell where this is going. Myself and the other
> shareholders kept every dime and I sleep fine at night. I worked to help
> get all the best employees jobs. Sure some were angry because they somehow
> felt they deserved something. Those were also the same employees I could
> have and probably should have already gotten rid of as they were problem
> children. Risk and reward. I took the risk, I get the reward. You want
> rewards? Take the risk.
>
> I did give a few people bonuses, help setup two in related businesses
> without loans (funneled business their way) but it was not any kind of % or
> really all that significant.I did that because they had been good people
> first, hard workers second, and last but not least, made my life easier
> when we were doing our thing.
>
> I am a capitlist and make no apologies for it.
>
> On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes <
> mattli...@rivervalleyinternet.net> wrote:
>
>> Now that I think about it - I wonder if my plan of C would be a way to
>> reduce income taxes too on the amount received?
>>
>> Either by funneling the money through the company and paying the
>> employees or having the buying company write a check to each of the key
>> employees.
>>
>> I’m not sure which would yield better results for everyone.
>>
>> The way I look at it though - I don’t have hard partners. That often
>> leads to problems. But everyone who sticks with the company and especially
>> if they make a career out of it should be compensated nicely - both each
>> year out of proceeds they helped make as well as out of a major sale if it
>> ever happens.
>>
>> If anyone here has ever worked for a company where the owner sold and got
>> 2 million and you had worked there for 10 years building it up —— well, how
>> did you feel?  Slap in the face.
>> --
>> AF mailing list
>> AF@af.afmug.com
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
>
>
> --
> Lewis Bergman
> 325-439-0533 Cell
> --
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>
>
> --
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>


-- 
Lewis Bergman
325-439-0533 Cell
-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Matt Hoppes]

Is it common?  No

Why isn’t it common?  I have no idea. 

Yes I as the owner took the risk. But X Y and Z employees have been here with 
me for the past 30 years and kept things running. 

Shouldn’t I be grateful for what they helped me build?

Like I said - I’m not judging anyone who makes a decision one way or the other. 
But to me it doesn’t seem right to say “thanks for 20 years of dedicated 
service and helping us make millions, go find another job now”. 

> On Aug 23, 2020, at 8:51 AM, Steve Jones  wrote:
> 
> 
> Is that a common thing in businesses? Employees getting a cut of a sale? I 
> could see the purchaser giving a retention or severance, but I d9nt see how 
> an employee would be entitled to anything more than a handshake or kick in 
> the pants
> 
>> On Sun, Aug 23, 2020, 7:22 AM Matt Hoppes 
>>  wrote:
>> Lewis,
>> It’s your business and you can do what you want to with it and I won’t judge 
>> anyone for that.
>> 
>> We do do profit sharing at the end of the year.
>> 
>> I guess it’s just a different cultural approach to business, while it’s true 
>> I do have all the risk, we wouldn’t be anywhere even close to where we are 
>> today if it weren’t for the dedicated employees and that I have. Yes some of 
>> them are high maintenance, but they bring talents and ability to the company 
>> that has kept it moving forward.
>> 
 On Aug 23, 2020, at 8:09 AM, Mark Radabaugh  wrote:
 
>>> Or do the compromise between you and Matt - the ESOP where the employees 
>>> end up owning it.  You get nearly the same money out and they eventually 
>>> get the same deal - if they can keep it going and build it.   It’s harder 
>>> because you have to figure out how to both get it to cash out and build at 
>>> the same time.
>>> 
>>> Mark
>>> 
 On Aug 23, 2020, at 7:59 AM, Lewis Bergman  wrote:
 
 This isn't the feel good kumbaya that might be popular, but I'll say this 
 on the subject of division of profits:
 I started my WISP by myself. All of you who started with your own  
 checkbook and sweat know what that took. My family sacrificed as I worked 
 massive hours. I did everything from accounting to server builds 
 maintenance to installs and tech support. All while I was making about 1/3 
 of minimum wage while I did it. We lived off my wife's school teacher 
 salary.
 
 I did that for a pretty short time as we had some early success and after 
 a couple of years I started hiring people. By the time I sold I did what I 
 wanted when I wanted. The people I hired I paid better than average hourly 
 wages for the job and gave bonuses paying them for their work as they did 
 it. I never asked any of them to sacrifice like I did nor did they offer.
 
 I took all the risk. If we failed I was the one in financial ruin. They 
 could all walk away inconvenienced but fairly unscathed while I was 
 personally liable for all company credit cards, vendor payments, carrier 
 contracts, etc.
 
 And of course you can tell where this is going. Myself and the other 
 shareholders kept every dime and I sleep fine at night. I worked to help 
 get all the best employees jobs. Sure some were angry because they somehow 
 felt they deserved something. Those were also the same employees I could 
 have and probably should have already gotten rid of as they were problem 
 children. Risk and reward. I took the risk, I get the reward. You want 
 rewards? Take the risk. 
 
 I did give a few people bonuses, help setup two in related businesses 
 without loans (funneled business their way) but it was not any kind of % 
 or really all that significant.I did that because they had been good 
 people first, hard workers second, and last but not least, made my life 
 easier when we were doing our thing.
 
 I am a capitlist and make no apologies for it.
 
> On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes 
>  wrote:
> Now that I think about it - I wonder if my plan of C would be a way to 
> reduce income taxes too on the amount received?
> 
> Either by funneling the money through the company and paying the 
> employees or having the buying company write a check to each of the key 
> employees. 
> 
> I’m not sure which would yield better results for everyone. 
> 
> The way I look at it though - I don’t have hard partners. That often 
> leads to problems. But everyone who sticks with the company and 
> especially if they make a career out of it should be compensated nicely - 
> both each year out of proceeds they helped make as well as out of a major 
> sale if it ever happens. 
> 
> If anyone here has ever worked for a company where the owner sold and got 
> 2 million and you had worked there for 10 years building it up —— well, 
> how did you feel?  Slap in the face. 
> -- 
> AF mailing list
> AF@

Re: [AFMUG] Buying and selling ISP’s

[Steve Jones]

Is that a common thing in businesses? Employees getting a cut of a sale? I
could see the purchaser giving a retention or severance, but I d9nt see how
an employee would be entitled to anything more than a handshake or kick in
the pants

On Sun, Aug 23, 2020, 7:22 AM Matt Hoppes 
wrote:

> Lewis,
> It’s your business and you can do what you want to with it and I won’t
> judge anyone for that.
>
> We do do profit sharing at the end of the year.
>
> I guess it’s just a different cultural approach to business, while it’s
> true I do have all the risk, we wouldn’t be anywhere even close to where we
> are today if it weren’t for the dedicated employees and that I have. Yes
> some of them are high maintenance, but they bring talents and ability to
> the company that has kept it moving forward.
>
> On Aug 23, 2020, at 8:09 AM, Mark Radabaugh  wrote:
>
> Or do the compromise between you and Matt - the ESOP where the employees
> end up owning it.  You get nearly the same money out and they eventually
> get the same deal - if they can keep it going and build it.   It’s harder
> because you have to figure out how to both get it to cash out and build at
> the same time.
>
> Mark
>
> On Aug 23, 2020, at 7:59 AM, Lewis Bergman 
> wrote:
>
> This isn't the feel good kumbaya that might be popular, but I'll say this
> on the subject of division of profits:
> I started my WISP by myself. All of you who started with your own
> checkbook and sweat know what that took. My family sacrificed as I worked
> massive hours. I did everything from accounting to server builds
> maintenance to installs and tech support. All while I was making about 1/3
> of minimum wage while I did it. We lived off my wife's school teacher
> salary.
>
> I did that for a pretty short time as we had some early success and after
> a couple of years I started hiring people. By the time I sold I did what I
> wanted when I wanted. The people I hired I paid better than average hourly
> wages for the job and gave bonuses paying them for their work as they did
> it. I never asked any of them to sacrifice like I did nor did they offer.
>
> I took all the risk. If we failed I was the one in financial ruin. They
> could all walk away inconvenienced but fairly unscathed while I was
> personally liable for all company credit cards, vendor payments, carrier
> contracts, etc.
>
> And of course you can tell where this is going. Myself and the other
> shareholders kept every dime and I sleep fine at night. I worked to help
> get all the best employees jobs. Sure some were angry because they somehow
> felt they deserved something. Those were also the same employees I could
> have and probably should have already gotten rid of as they were problem
> children. Risk and reward. I took the risk, I get the reward. You want
> rewards? Take the risk.
>
> I did give a few people bonuses, help setup two in related businesses
> without loans (funneled business their way) but it was not any kind of % or
> really all that significant.I did that because they had been good people
> first, hard workers second, and last but not least, made my life easier
> when we were doing our thing.
>
> I am a capitlist and make no apologies for it.
>
> On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes <
> mattli...@rivervalleyinternet.net> wrote:
>
>> Now that I think about it - I wonder if my plan of C would be a way to
>> reduce income taxes too on the amount received?
>>
>> Either by funneling the money through the company and paying the
>> employees or having the buying company write a check to each of the key
>> employees.
>>
>> I’m not sure which would yield better results for everyone.
>>
>> The way I look at it though - I don’t have hard partners. That often
>> leads to problems. But everyone who sticks with the company and especially
>> if they make a career out of it should be compensated nicely - both each
>> year out of proceeds they helped make as well as out of a major sale if it
>> ever happens.
>>
>> If anyone here has ever worked for a company where the owner sold and got
>> 2 million and you had worked there for 10 years building it up —— well, how
>> did you feel?  Slap in the face.
>> --
>> AF mailing list
>> AF@af.afmug.com
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
>
>
> --
> Lewis Bergman
> 325-439-0533 Cell
> --
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>
>
> --
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>
> --
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>
-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Matt Hoppes]

Lewis,
It’s your business and you can do what you want to with it and I won’t judge 
anyone for that.

We do do profit sharing at the end of the year.

I guess it’s just a different cultural approach to business, while it’s true I 
do have all the risk, we wouldn’t be anywhere even close to where we are today 
if it weren’t for the dedicated employees and that I have. Yes some of them are 
high maintenance, but they bring talents and ability to the company that has 
kept it moving forward.

> On Aug 23, 2020, at 8:09 AM, Mark Radabaugh  wrote:
> 
> Or do the compromise between you and Matt - the ESOP where the employees end 
> up owning it.  You get nearly the same money out and they eventually get the 
> same deal - if they can keep it going and build it.   It’s harder because you 
> have to figure out how to both get it to cash out and build at the same time.
> 
> Mark
> 
>> On Aug 23, 2020, at 7:59 AM, Lewis Bergman  wrote:
>> 
>> This isn't the feel good kumbaya that might be popular, but I'll say this on 
>> the subject of division of profits:
>> I started my WISP by myself. All of you who started with your own  checkbook 
>> and sweat know what that took. My family sacrificed as I worked massive 
>> hours. I did everything from accounting to server builds maintenance to 
>> installs and tech support. All while I was making about 1/3 of minimum wage 
>> while I did it. We lived off my wife's school teacher salary.
>> 
>> I did that for a pretty short time as we had some early success and after a 
>> couple of years I started hiring people. By the time I sold I did what I 
>> wanted when I wanted. The people I hired I paid better than average hourly 
>> wages for the job and gave bonuses paying them for their work as they did 
>> it. I never asked any of them to sacrifice like I did nor did they offer.
>> 
>> I took all the risk. If we failed I was the one in financial ruin. They 
>> could all walk away inconvenienced but fairly unscathed while I was 
>> personally liable for all company credit cards, vendor payments, carrier 
>> contracts, etc.
>> 
>> And of course you can tell where this is going. Myself and the other 
>> shareholders kept every dime and I sleep fine at night. I worked to help get 
>> all the best employees jobs. Sure some were angry because they somehow felt 
>> they deserved something. Those were also the same employees I could have and 
>> probably should have already gotten rid of as they were problem children. 
>> Risk and reward. I took the risk, I get the reward. You want rewards? Take 
>> the risk. 
>> 
>> I did give a few people bonuses, help setup two in related businesses 
>> without loans (funneled business their way) but it was not any kind of % or 
>> really all that significant.I did that because they had been good people 
>> first, hard workers second, and last but not least, made my life easier when 
>> we were doing our thing.
>> 
>> I am a capitlist and make no apologies for it.
>> 
>>> On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes 
>>>  wrote:
>>> Now that I think about it - I wonder if my plan of C would be a way to 
>>> reduce income taxes too on the amount received?
>>> 
>>> Either by funneling the money through the company and paying the employees 
>>> or having the buying company write a check to each of the key employees. 
>>> 
>>> I’m not sure which would yield better results for everyone. 
>>> 
>>> The way I look at it though - I don’t have hard partners. That often leads 
>>> to problems. But everyone who sticks with the company and especially if 
>>> they make a career out of it should be compensated nicely - both each year 
>>> out of proceeds they helped make as well as out of a major sale if it ever 
>>> happens. 
>>> 
>>> If anyone here has ever worked for a company where the owner sold and got 2 
>>> million and you had worked there for 10 years building it up —— well, how 
>>> did you feel?  Slap in the face. 
>>> -- 
>>> AF mailing list
>>> AF@af.afmug.com
>>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>> 
>> 
>> -- 
>> Lewis Bergman
>> 325-439-0533 Cell
>> -- 
>> AF mailing list
>> AF@af.afmug.com
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Mark Radabaugh]

Or do the compromise between you and Matt - the ESOP where the employees end up 
owning it.  You get nearly the same money out and they eventually get the same 
deal - if they can keep it going and build it.   It’s harder because you have 
to figure out how to both get it to cash out and build at the same time.

Mark

> On Aug 23, 2020, at 7:59 AM, Lewis Bergman  wrote:
> 
> This isn't the feel good kumbaya that might be popular, but I'll say this on 
> the subject of division of profits:
> I started my WISP by myself. All of you who started with your own  checkbook 
> and sweat know what that took. My family sacrificed as I worked massive 
> hours. I did everything from accounting to server builds maintenance to 
> installs and tech support. All while I was making about 1/3 of minimum wage 
> while I did it. We lived off my wife's school teacher salary.
> 
> I did that for a pretty short time as we had some early success and after a 
> couple of years I started hiring people. By the time I sold I did what I 
> wanted when I wanted. The people I hired I paid better than average hourly 
> wages for the job and gave bonuses paying them for their work as they did it. 
> I never asked any of them to sacrifice like I did nor did they offer.
> 
> I took all the risk. If we failed I was the one in financial ruin. They could 
> all walk away inconvenienced but fairly unscathed while I was personally 
> liable for all company credit cards, vendor payments, carrier contracts, etc.
> 
> And of course you can tell where this is going. Myself and the other 
> shareholders kept every dime and I sleep fine at night. I worked to help get 
> all the best employees jobs. Sure some were angry because they somehow felt 
> they deserved something. Those were also the same employees I could have and 
> probably should have already gotten rid of as they were problem children. 
> Risk and reward. I took the risk, I get the reward. You want rewards? Take 
> the risk. 
> 
> I did give a few people bonuses, help setup two in related businesses without 
> loans (funneled business their way) but it was not any kind of % or really 
> all that significant.I did that because they had been good people first, hard 
> workers second, and last but not least, made my life easier when we were 
> doing our thing.
> 
> I am a capitlist and make no apologies for it.
> 
> On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes 
>  > wrote:
> Now that I think about it - I wonder if my plan of C would be a way to reduce 
> income taxes too on the amount received?
> 
> Either by funneling the money through the company and paying the employees or 
> having the buying company write a check to each of the key employees. 
> 
> I’m not sure which would yield better results for everyone. 
> 
> The way I look at it though - I don’t have hard partners. That often leads to 
> problems. But everyone who sticks with the company and especially if they 
> make a career out of it should be compensated nicely - both each year out of 
> proceeds they helped make as well as out of a major sale if it ever happens. 
> 
> If anyone here has ever worked for a company where the owner sold and got 2 
> million and you had worked there for 10 years building it up —— well, how did 
> you feel?  Slap in the face. 
> -- 
> AF mailing list
> AF@af.afmug.com 
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com 
> 
> 
> 
> -- 
> Lewis Bergman
> 325-439-0533 Cell
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com

-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Lewis Bergman]

This isn't the feel good kumbaya that might be popular, but I'll say this
on the subject of division of profits:
I started my WISP by myself. All of you who started with your own
checkbook and sweat know what that took. My family sacrificed as I worked
massive hours. I did everything from accounting to server builds
maintenance to installs and tech support. All while I was making about 1/3
of minimum wage while I did it. We lived off my wife's school teacher
salary.

I did that for a pretty short time as we had some early success and after a
couple of years I started hiring people. By the time I sold I did what I
wanted when I wanted. The people I hired I paid better than average hourly
wages for the job and gave bonuses paying them for their work as they did
it. I never asked any of them to sacrifice like I did nor did they offer.

I took all the risk. If we failed I was the one in financial ruin. They
could all walk away inconvenienced but fairly unscathed while I was
personally liable for all company credit cards, vendor payments, carrier
contracts, etc.

And of course you can tell where this is going. Myself and the other
shareholders kept every dime and I sleep fine at night. I worked to help
get all the best employees jobs. Sure some were angry because they somehow
felt they deserved something. Those were also the same employees I could
have and probably should have already gotten rid of as they were problem
children. Risk and reward. I took the risk, I get the reward. You want
rewards? Take the risk.

I did give a few people bonuses, help setup two in related businesses
without loans (funneled business their way) but it was not any kind of % or
really all that significant.I did that because they had been good people
first, hard workers second, and last but not least, made my life easier
when we were doing our thing.

I am a capitlist and make no apologies for it.

On Sun, Aug 23, 2020 at 6:16 AM Matt Hoppes <
mattli...@rivervalleyinternet.net> wrote:

> Now that I think about it - I wonder if my plan of C would be a way to
> reduce income taxes too on the amount received?
>
> Either by funneling the money through the company and paying the employees
> or having the buying company write a check to each of the key employees.
>
> I’m not sure which would yield better results for everyone.
>
> The way I look at it though - I don’t have hard partners. That often leads
> to problems. But everyone who sticks with the company and especially if
> they make a career out of it should be compensated nicely - both each year
> out of proceeds they helped make as well as out of a major sale if it ever
> happens.
>
> If anyone here has ever worked for a company where the owner sold and got
> 2 million and you had worked there for 10 years building it up —— well, how
> did you feel?  Slap in the face.
> --
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>


-- 
Lewis Bergman
325-439-0533 Cell
-- 
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Re: [AFMUG] Buying and selling ISP’s

[Matt Hoppes]

Now that I think about it - I wonder if my plan of C would be a way to reduce 
income taxes too on the amount received?

Either by funneling the money through the company and paying the employees or 
having the buying company write a check to each of the key employees. 

I’m not sure which would yield better results for everyone. 

The way I look at it though - I don’t have hard partners. That often leads to 
problems. But everyone who sticks with the company and especially if they make 
a career out of it should be compensated nicely - both each year out of 
proceeds they helped make as well as out of a major sale if it ever happens. 

If anyone here has ever worked for a company where the owner sold and got 2 
million and you had worked there for 10 years building it up —— well, how did 
you feel?  Slap in the face. 
-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Steve Jones]

I wish travis was still here, I remember when his sale came out, apparently
bad chucks too, there was some dissent.
But his advise back yonder, I took to the bosses and got laughed at. But he
showed up at wispamerica a few years ago with the same advice and it became
a company plan.
It always amazes me in business when a guy says something out of the norm
and is dismissed as a zealot, until he has some millions, then his zealotry
is golden

 But then again, IIRC his advice came via dslreports back then, so that's
an awful large grain of salt.



On Sat, Aug 22, 2020, 11:02 AM Ken Hohhof  wrote:

> What ever happened to Travis Johnson?  Is he a big real estate tycoon now?
>
>
>
> For that matter, what ever happened to Doug Clark?
>
>
>
> It doesn’t seem the same without our optimist and pessimist bookends.  OK,
> that’s an oversimplification, but they were both unique personalities.
>
>
>
>
>
> *From:* AF  *On Behalf Of *ch...@wbmfg.com
> *Sent:* Saturday, August 22, 2020 10:36 AM
> *To:* AnimalFarm Microwave Users Group 
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> I sold to JAB.  Got $9.5M for 6000 customers as I recall.  Travis,
> Sterling and I all sold about the same time to them.
>
>
>
> Once debt was settled enough so that the remaining fiber portion of the
> company could continue as a solvent company, we split it amongst the
> shareholders.  The two primary shareholders got a good chunk.
>
>
>
> Then one of the shareholders' wives got greed and years of lawsuits
> against all the other shareholders ensued...
>
>
>
> So there’s that.  (And huge capital gains bite).
>
>
>
> *From:* Matt Hoppes
>
> *Sent:* Saturday, August 22, 2020 9:03 AM
>
> *To:* AnimalFarm Microwave Users Group
>
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> If someone offered me enough I might sell.
>
>
>
> But it needs to be enough to be worth my while to walk away from:
>
>
>
> A) a job I enjoy most days
>
> B) walking away from recurring revenue for the next 10 years
>
> C) enough to distribute to my employees who have helped build the company
> to what it is today.
>
>
>
> I’m not going to just take money and say “see what suckers!”
>
>
>
> Most of them work as hard or harder than I do. They’re getting a chunk of
> any sale that happens.
>
>
>
> On Aug 22, 2020, at 10:56 AM, Ken Hohhof  wrote:
>
> 
>
> What stopped me from selling several years ago was the tax consequences.
> Uncle Sam was going to get almost as much as I was.
>
>
>
> It’s possible that hiring a good tax advisor in advance could improve this
> situation.  Also if you’re thinking about buying or selling, it would
> probably make sense to look at current taxation of capital gains and any
> associated tax dodges, and how that might change in various post-election
> scenarios.
>
>
>
> Generally I’ve only been interested in cash deals.  I remember when Keyon
> wanted to buy me out with stock, and claimed that Keyon stock was “better
> than cash” because it would increase in value.  Next thing I heard, they
> were in bankruptcy.  But I have heard of merger-like acquisitions where the
> seller gets stock and even an executive position in the acquiring company.
> For some people, that might be a better situation, both from the standpoint
> of a continuing income, and how much Uncle Sam grabs.  Not sure if there
> would be a capital gain if you get paid in stock, and what the cost basis
> would be for that stock down the road if you sell it.
>
>
>
>
>
> *From:* AF  *On Behalf Of *Steve Jones
> *Sent:* Saturday, August 22, 2020 9:21 AM
> *To:* AnimalFarm Microwave Users Group 
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> The boss wants to find some around here for sale, but jab/rise kind of
> cleaned out the shelves. It seems the last few standing either did merger's
> or are just standing on pure spite and irritation like us and wouldnt sell
> if their teeth were getting pulled out.
>
>
>
> On Sat, Aug 22, 2020, 9:16 AM Mike Hammett  wrote:
>
> What does the revenue multiplier end up being, though?
>
> 5x EBIDTA / revenue gets you what, in purchases that have been made?
>
>
>
> -
> Mike Hammett
> Intelligent Computing Solutions <http://www.ics-il.com/>
> <https://www.facebook.com/ICSIL>
> <https://plus.google.com/+IntelligentComputingSolutionsDeKalb>
> <https://www.linkedin.com/company/intelligent-computing-solutions>
> <https://twitter.com/ICSIL>
> Midwest Internet Exchange <http://www.midwest-ix.com/>
> <https://www.facebook.com/mdwestix>
> <

Re: [AFMUG] Buying and selling ISP’s

[Ken Hohhof]

You can find anything on the Internet.  How to burn cash:

https://www.youtube.com/watch?v=e-oDl7Seix0

 

 

From: AF  On Behalf Of Chuck McCown
Sent: Saturday, August 22, 2020 10:29 PM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

That can be anything.  There is no connection between revenue and earnings.  
You can have $2M in revenue  but -$5M in income if you burned cash to generate 
sales.

Sent from my iPhone





On Aug 22, 2020, at 7:35 PM, Mike Hammett mailto:af...@ics-il.net> > wrote:



Right, but what I'm asking is that if 5x EDIBTA = Y, then what was Y / annual 
revenue?



-
Mike Hammett
 <http://www.ics-il.com/> Intelligent Computing Solutions
 <https://www.facebook.com/ICSIL>  
<https://plus.google.com/+IntelligentComputingSolutionsDeKalb>  
<https://www.linkedin.com/company/intelligent-computing-solutions>  
<https://twitter.com/ICSIL> 
 <http://www.midwest-ix.com/> Midwest Internet Exchange
 <https://www.facebook.com/mdwestix>  
<https://www.linkedin.com/company/midwest-internet-exchange>  
<https://twitter.com/mdwestix> 
 <http://www.thebrotherswisp.com/> The Brothers WISP
 <https://www.facebook.com/thebrotherswisp>  
<https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg> 





  _  


From: "Chuck McCown" mailto:ch...@wbmfg.com> >
To: "AnimalFarm Microwave Users Group" mailto:af@af.afmug.com> >
Sent: Saturday, August 22, 2020 10:01:44 AM
Subject: Re: [AFMUG] Buying and selling ISP’s

Whatever 5x your earnings are.  Not sales or revenue or gross profit but bottom 
line earnings on your income statement/ pl. Your taxable income.

Sent from my iPhone

 

On Aug 22, 2020, at 8:16 AM, Mike Hammett mailto:af...@ics-il.net> > wrote:



What does the revenue multiplier end up being, though?

5x EBIDTA / revenue gets you what, in purchases that have been made?



-
Mike Hammett
 <http://www.ics-il.com/> Intelligent Computing Solutions
 <https://www.facebook.com/ICSIL>  
<https://plus.google.com/+IntelligentComputingSolutionsDeKalb>  
<https://www.linkedin.com/company/intelligent-computing-solutions>  
<https://twitter.com/ICSIL> 
 <http://www.midwest-ix.com/> Midwest Internet Exchange
 <https://www.facebook.com/mdwestix>  
<https://www.linkedin.com/company/midwest-internet-exchange>  
<https://twitter.com/mdwestix> 
 <http://www.thebrotherswisp.com/> The Brothers WISP
 <https://www.facebook.com/thebrotherswisp>  
<https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg> 





  _____  


From: "Chuck McCown" mailto:ch...@wbmfg.com> >
To: "AnimalFarm Microwave Users Group" mailto:af@af.afmug.com> >
Sent: Friday, August 21, 2020 8:20:47 PM
Subject: Re: [AFMUG] Buying and selling ISP’s

5 x ebidta

Revenue multiples are of no value.

Sent from my iPhone

 

On Aug 21, 2020, at 5:30 PM, cjwstudios mailto:cjwstud...@gmail.com> > wrote:



1x annual revenue and hope the customers stay on

 

On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes mailto:mattli...@rivervalleyinternet.net> > wrote:

This is the issue I’ve always had when I’ve looked at buying an ISP. It always 
seems like a lot more money I would have to put out to buy then I could just 
build and take the customers if something is wrong with the current network.



> On Aug 21, 2020, at 12:43 PM, Seth Mattinen  <mailto:se...@rollernet.us> > wrote:

> 

> On 8/20/20 8:13 PM, Steve Jones wrote:

>> I think you either buy or sell, isp isnt really a flip thing

> 

> 

> There is/was someone in my part of the country buying up ISPs and trying to 
> package them all together as a flip. My ISP customers tell me it's far easier 
> to get the flipper's customers to cancel and switch than buy their company.

> 

> -- 

> AF mailing list

> AF@af.afmug.com <mailto:AF@af.afmug.com> 

> http://af.afmug.com/mailman/listinfo/af_af.afmug.com



-- 

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AF@af.afmug.com <mailto:AF@af.afmug.com> 
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

 

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http://af.afmug.com/mailman/listinfo/af_af.afmug.com

 

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Re: [AFMUG] Buying and selling ISP’s

[Chuck McCown]

That can be anything.  There is no connection between revenue and earnings.  
You can have $2M in revenue  but -$5M in income if you burned cash to generate 
sales.

Sent from my iPhone

> On Aug 22, 2020, at 7:35 PM, Mike Hammett  wrote:
> 
> 
> Right, but what I'm asking is that if 5x EDIBTA = Y, then what was Y / annual 
> revenue?
> 
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Saturday, August 22, 2020 10:01:44 AM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> Whatever 5x your earnings are.  Not sales or revenue or gross profit but 
> bottom line earnings on your income statement/ pl. Your taxable income.
> 
> Sent from my iPhone
> 
> On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:
> 
> 
> What does the revenue multiplier end up being, though?
> 
> 5x EBIDTA / revenue gets you what, in purchases that have been made?
> 
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Friday, August 21, 2020 8:20:47 PM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> 5 x ebidta
> Revenue multiples are of no value.
> 
> Sent from my iPhone
> 
> On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:
> 
> 
> 1x annual revenue and hope the customers stay on
> 
>> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes 
>>  wrote:
>> This is the issue I’ve always had when I’ve looked at buying an ISP. It 
>> always seems like a lot more money I would have to put out to buy then I 
>> could just build and take the customers if something is wrong with the 
>> current network.
>> 
>> 
>> 
>> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
>> 
>> > 
>> 
>> > On 8/20/20 8:13 PM, Steve Jones wrote:
>> 
>> >> I think you either buy or sell, isp isnt really a flip thing
>> 
>> > 
>> 
>> > 
>> 
>> > There is/was someone in my part of the country buying up ISPs and trying 
>> > to package them all together as a flip. My ISP customers tell me it's far 
>> > easier to get the flipper's customers to cancel and switch than buy their 
>> > company.
>> 
>> > 
>> 
>> > -- 
>> 
>> > AF mailing list
>> 
>> > AF@af.afmug.com
>> 
>> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>> 
>> 
>> 
>> -- 
>> 
>> AF mailing list
>> 
>> AF@af.afmug.com
>> 
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
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Re: [AFMUG] Buying and selling ISP’s

[Steve Jones]

Other than startups, I think ABC is all that's left in the industry.
C would probably be a tough one for most of the remaining WISPs. There's
some integrity in this world. Maybe even matt Hoppes

On Sat, Aug 22, 2020, 10:04 AM Matt Hoppes <
mattli...@rivervalleyinternet.net> wrote:

> If someone offered me enough I might sell.
>
> But it needs to be enough to be worth my while to walk away from:
>
> A) a job I enjoy most days
> B) walking away from recurring revenue for the next 10 years
> C) enough to distribute to my employees who have helped build the company
> to what it is today.
>
> I’m not going to just take money and say “see what suckers!”
>
> Most of them work as hard or harder than I do. They’re getting a chunk of
> any sale that happens.
>
> On Aug 22, 2020, at 10:56 AM, Ken Hohhof  wrote:
>
> 
>
> What stopped me from selling several years ago was the tax consequences.
> Uncle Sam was going to get almost as much as I was.
>
>
>
> It’s possible that hiring a good tax advisor in advance could improve this
> situation.  Also if you’re thinking about buying or selling, it would
> probably make sense to look at current taxation of capital gains and any
> associated tax dodges, and how that might change in various post-election
> scenarios.
>
>
>
> Generally I’ve only been interested in cash deals.  I remember when Keyon
> wanted to buy me out with stock, and claimed that Keyon stock was “better
> than cash” because it would increase in value.  Next thing I heard, they
> were in bankruptcy.  But I have heard of merger-like acquisitions where the
> seller gets stock and even an executive position in the acquiring company.
> For some people, that might be a better situation, both from the standpoint
> of a continuing income, and how much Uncle Sam grabs.  Not sure if there
> would be a capital gain if you get paid in stock, and what the cost basis
> would be for that stock down the road if you sell it.
>
>
>
>
>
> *From:* AF  *On Behalf Of *Steve Jones
> *Sent:* Saturday, August 22, 2020 9:21 AM
> *To:* AnimalFarm Microwave Users Group 
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> The boss wants to find some around here for sale, but jab/rise kind of
> cleaned out the shelves. It seems the last few standing either did merger's
> or are just standing on pure spite and irritation like us and wouldnt sell
> if their teeth were getting pulled out.
>
>
>
> On Sat, Aug 22, 2020, 9:16 AM Mike Hammett  wrote:
>
> What does the revenue multiplier end up being, though?
>
> 5x EBIDTA / revenue gets you what, in purchases that have been made?
>
>
>
> -
> Mike Hammett
> Intelligent Computing Solutions <http://www.ics-il.com/>
> <https://www.facebook.com/ICSIL>
> <https://plus.google.com/+IntelligentComputingSolutionsDeKalb>
> <https://www.linkedin.com/company/intelligent-computing-solutions>
> <https://twitter.com/ICSIL>
> Midwest Internet Exchange <http://www.midwest-ix.com/>
> <https://www.facebook.com/mdwestix>
> <https://www.linkedin.com/company/midwest-internet-exchange>
> <https://twitter.com/mdwestix>
> The Brothers WISP <http://www.thebrotherswisp.com/>
> <https://www.facebook.com/thebrotherswisp>
>
>
> <https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg>
> --
>
> *From: *"Chuck McCown" 
> *To: *"AnimalFarm Microwave Users Group" 
> *Sent: *Friday, August 21, 2020 8:20:47 PM
> *Subject: *Re: [AFMUG] Buying and selling ISP’s
>
> 5 x ebidta
>
> Revenue multiples are of no value.
>
> Sent from my iPhone
>
>
>
> On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:
>
> 
>
> 1x annual revenue and hope the customers stay on
>
>
>
> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes <
> mattli...@rivervalleyinternet.net> wrote:
>
> This is the issue I’ve always had when I’ve looked at buying an ISP. It
> always seems like a lot more money I would have to put out to buy then I
> could just build and take the customers if something is wrong with the
> current network.
>
>
>
> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
>
> >
>
> > On 8/20/20 8:13 PM, Steve Jones wrote:
>
> >> I think you either buy or sell, isp isnt really a flip thing
>
> >
>
> >
>
> > There is/was someone in my part of the country buying up ISPs and trying
> to package them all together as a flip. My ISP customers tell me it's far
> easier to get the flipper's customers to cancel and switch than buy their
> company.
>
> >
>
> > --
>
>

Re: [AFMUG] Buying and selling ISP’s

[Lewis Bergman]

The conventional wisdom is that delaying the payment of taxes is always
good.
Another line of thought is that taxes are never going to be lower than they
are right now so pay them now.
Neither is always true.

On Sat, Aug 22, 2020 at 5:09 PM Ken Hohhof  wrote:

> I remember from a long ago business school class that unprofitable
> businesses can and do survive for many years if they are cash flow
> positive, but profitable businesses with negative cashflow will be gone
> before you know it.  That may not be as true in the current “new economy”
> where you just raise more (other people’s) money.  But I still look to
> cashflow.  But like Mark is saying, you can’t trick yourself, like by
> kicking taxes down the road.  Or there are some WISPs that survive entirely
> by charging install fees, selling CPE to customers at huge markups, and
> talking new customers into prepaying the first year.  They are losing money
> AND they are cashflow negative on their entire customer base, the only
> thing that keeps them afloat is signing up new customers.  If that every
> stops, the whole thing collapses like a house of cards.
>
>
>
> But back to depreciation recapture.  When I was deciding whether to sell
> to JAB, my accountant didn’t bring that up.  What he pointed out was that
> the entire sale price would be taxed, the cost basis was zero.  Even if I
> had put seed money into the company in the early days, those expenses had
> been used to offset revenue for tax purposes.  I had mistakenly thought
> only the difference between the sale price and what I had put into it would
> be taxed.
>
>
>
> But I must be misunderstanding the depreciation recapture thing,
> especially since it sounds like it doesn’t matter if you expensed or
> depreciated the equipment, they want to tax all those expenses that were
> used in the profit=sales-expenses equation in previous tax years.
>
>
>
> Ignoring the stuff we bought that has long since died or been retired and
> replaced with newer stuff, I usually figure the CPE plus a prorated share
> of the tower equipment costs almost a year of gross revenue per customer
> (we use Cambium 450 which is on the expensive side).  ARPU is climbing as
> less and less people take the lowest speed tier, but that is somewhat
> offset by small cells and less subs per AP, as well as moving toward all
> licensed backhauls.  But when customer pays $600/year and SM alone can cost
> $300 or more, then add in maybe 1/15 of an AP, and you’re somewhere between
> 0.5 and 1.0 times annual revenue invested in equipment.  (Then rinse and
> repeat every 3-5 years as equipment becomes obsolete.)
>
>
>
> So if I sell and get, let’s just say 1x revenue, and then pay tax on the
> entire sale price, are they going to want to tax the equipment at what will
> probably be the highest marginal tax rate on top of that?  It seems
> entirely possible the taxes would eat up the entire sale price.  That can’t
> be right.  I must be misunderstanding something.
>
>
>
> I also doubt many of us track every capital asset and when it gets
> replaced due to lightning, water intrusion, it becomes obsolete, or you
> just need something faster.  Like you replace Tranzeo with FSK with 430
> with 450 with 450i with 450m.  And while occasionally you might redeploy a
> piece of equipment to a smaller site, usually it becomes eWaste.  But if I
> had to document all that to avoid paying tax on every piece of equipment I
> ever bought, I’d be screwed, my asset records are not that detailed.
>
>
>
> I’m also not clear on whether this only applies to large capital assets,
> or everything we ever expensed.  Like cable and mounts and POEs and
> antennas, and what about license keys for radios.  Like capacity keys or
> lite to full keys or all those keys you buy for a licensed link.
>
>
>
> *From:* AF  *On Behalf Of *ch...@wbmfg.com
> *Sent:* Saturday, August 22, 2020 4:19 PM
> *To:* AnimalFarm Microwave Users Group 
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> +1^6
>
>
>
> I like my books to be surgically accurate and very current.  I want to
> know exactly where we are every month.  I have a third column of class of
> expenses in my books.  Any of the crap I buy because I want to or I am
> experimenting or I think I can fix up an old piece of junk goes in the
> column.  Then it does not factor into my contracting or manufacturing
> profit and losses.  For example, almost every month manufacturing is in the
> black.  Once in a while we have delayed shipments put us in the red but the
> next month is it doing that much better.
>
>
>
> Contracting comes and goes.  Some weeks I have the guys just doing work on
> the buildings and grounds.  I have them cod

Re: [AFMUG] Buying and selling ISP’s

[Mike Hammett]

Right, but what I'm asking is that if 5x EDIBTA = Y, then what was Y / annual 
revenue? 




- 
Mike Hammett 
Intelligent Computing Solutions 

Midwest Internet Exchange 

The Brothers WISP 




- Original Message -

From: "Chuck McCown"  
To: "AnimalFarm Microwave Users Group"  
Sent: Saturday, August 22, 2020 10:01:44 AM 
Subject: Re: [AFMUG] Buying and selling ISP’s 

Whatever 5x your earnings are. Not sales or revenue or gross profit but bottom 
line earnings on your income statement/ pl. Your taxable income. 


Sent from my iPhone 



On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote: 







What does the revenue multiplier end up being, though? 

5x EBIDTA / revenue gets you what, in purchases that have been made? 




- 
Mike Hammett 
Intelligent Computing Solutions 

Midwest Internet Exchange 

The Brothers WISP 




- Original Message -

From: "Chuck McCown"  
To: "AnimalFarm Microwave Users Group"  
Sent: Friday, August 21, 2020 8:20:47 PM 
Subject: Re: [AFMUG] Buying and selling ISP’s 

5 x ebidta 
Revenue multiples are of no value. 


Sent from my iPhone 



On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote: 








1x annual revenue and hope the customers stay on 



On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes < mattli...@rivervalleyinternet.net 
> wrote: 


This is the issue I’ve always had when I’ve looked at buying an ISP. It always 
seems like a lot more money I would have to put out to buy then I could just 
build and take the customers if something is wrong with the current network. 



> On Aug 21, 2020, at 12:43 PM, Seth Mattinen < se...@rollernet.us > wrote: 

> 

> On 8/20/20 8:13 PM, Steve Jones wrote: 

>> I think you either buy or sell, isp isnt really a flip thing 

> 

> 

> There is/was someone in my part of the country buying up ISPs and trying to 
> package them all together as a flip. My ISP customers tell me it's far easier 
> to get the flipper's customers to cancel and switch than buy their company. 

> 

> -- 

> AF mailing list 

> AF@af.afmug.com 

> http://af.afmug.com/mailman/listinfo/af_af.afmug.com 



-- 

AF mailing list 

AF@af.afmug.com 

http://af.afmug.com/mailman/listinfo/af_af.afmug.com 



-- 
AF mailing list 
AF@af.afmug.com 
http://af.afmug.com/mailman/listinfo/af_af.afmug.com 



-- 
AF mailing list 
AF@af.afmug.com 
http://af.afmug.com/mailman/listinfo/af_af.afmug.com 

-- 
AF mailing list 
AF@af.afmug.com 
http://af.afmug.com/mailman/listinfo/af_af.afmug.com 



-- 
AF mailing list 
AF@af.afmug.com 
http://af.afmug.com/mailman/listinfo/af_af.afmug.com 

-- 
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AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Mark Radabaugh]

On our books we carry a fairly large liability item that is ‘deferred taxes’.   
It’s made up what we didn’t pay in taxes due to using tax breaks like 
accelerated or bonus depreciation.  That number works it’s way down over time.  
 If you sell the business you may or may not have to pay those back - it 
depends on how the deal is structured and if those credits transfer to the 
buyers or if you are stuck paying it out of the proceeds.

Mark

> On Aug 22, 2020, at 6:09 PM, Ken Hohhof  wrote:
> 
> 
> I remember from a long ago business school class that unprofitable businesses 
> can and do survive for many years if they are cash flow positive, but 
> profitable businesses with negative cashflow will be gone before you know it. 
>  That may not be as true in the current “new economy” where you just raise 
> more (other people’s) money.  But I still look to cashflow.  But like Mark is 
> saying, you can’t trick yourself, like by kicking taxes down the road.  Or 
> there are some WISPs that survive entirely by charging install fees, selling 
> CPE to customers at huge markups, and talking new customers into prepaying 
> the first year.  They are losing money AND they are cashflow negative on 
> their entire customer base, the only thing that keeps them afloat is signing 
> up new customers.  If that every stops, the whole thing collapses like a 
> house of cards.
>  
> But back to depreciation recapture.  When I was deciding whether to sell to 
> JAB, my accountant didn’t bring that up.  What he pointed out was that the 
> entire sale price would be taxed, the cost basis was zero.  Even if I had put 
> seed money into the company in the early days, those expenses had been used 
> to offset revenue for tax purposes.  I had mistakenly thought only the 
> difference between the sale price and what I had put into it would be taxed.
>  
> But I must be misunderstanding the depreciation recapture thing, especially 
> since it sounds like it doesn’t matter if you expensed or depreciated the 
> equipment, they want to tax all those expenses that were used in the 
> profit=sales-expenses equation in previous tax years.
>  
> Ignoring the stuff we bought that has long since died or been retired and 
> replaced with newer stuff, I usually figure the CPE plus a prorated share of 
> the tower equipment costs almost a year of gross revenue per customer (we use 
> Cambium 450 which is on the expensive side).  ARPU is climbing as less and 
> less people take the lowest speed tier, but that is somewhat offset by small 
> cells and less subs per AP, as well as moving toward all licensed backhauls.  
> But when customer pays $600/year and SM alone can cost $300 or more, then add 
> in maybe 1/15 of an AP, and you’re somewhere between 0.5 and 1.0 times annual 
> revenue invested in equipment.  (Then rinse and repeat every 3-5 years as 
> equipment becomes obsolete.)
>  
> So if I sell and get, let’s just say 1x revenue, and then pay tax on the 
> entire sale price, are they going to want to tax the equipment at what will 
> probably be the highest marginal tax rate on top of that?  It seems entirely 
> possible the taxes would eat up the entire sale price.  That can’t be right.  
> I must be misunderstanding something.
>  
> I also doubt many of us track every capital asset and when it gets replaced 
> due to lightning, water intrusion, it becomes obsolete, or you just need 
> something faster.  Like you replace Tranzeo with FSK with 430 with 450 with 
> 450i with 450m.  And while occasionally you might redeploy a piece of 
> equipment to a smaller site, usually it becomes eWaste.  But if I had to 
> document all that to avoid paying tax on every piece of equipment I ever 
> bought, I’d be screwed, my asset records are not that detailed.
>  
> I’m also not clear on whether this only applies to large capital assets, or 
> everything we ever expensed.  Like cable and mounts and POEs and antennas, 
> and what about license keys for radios.  Like capacity keys or lite to full 
> keys or all those keys you buy for a licensed link.
>  
> From: AF  On Behalf Of ch...@wbmfg.com
> Sent: Saturday, August 22, 2020 4:19 PM
> To: AnimalFarm Microwave Users Group 
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> +1^6
>  
> I like my books to be surgically accurate and very current.  I want to know 
> exactly where we are every month.  I have a third column of class of expenses 
> in my books.  Any of the crap I buy because I want to or I am experimenting 
> or I think I can fix up an old piece of junk goes in the column.  Then it 
> does not factor into my contracting or manufacturing profit and losses.  For 
> example, almost every month manufacturing is in the black.  Once in a while 
> we have delayed shipments put us 

Re: [AFMUG] Buying and selling ISP’s

[Ken Hohhof]

I remember from a long ago business school class that unprofitable businesses 
can and do survive for many years if they are cash flow positive, but 
profitable businesses with negative cashflow will be gone before you know it.  
That may not be as true in the current “new economy” where you just raise more 
(other people’s) money.  But I still look to cashflow.  But like Mark is 
saying, you can’t trick yourself, like by kicking taxes down the road.  Or 
there are some WISPs that survive entirely by charging install fees, selling 
CPE to customers at huge markups, and talking new customers into prepaying the 
first year.  They are losing money AND they are cashflow negative on their 
entire customer base, the only thing that keeps them afloat is signing up new 
customers.  If that every stops, the whole thing collapses like a house of 
cards.

 

But back to depreciation recapture.  When I was deciding whether to sell to 
JAB, my accountant didn’t bring that up.  What he pointed out was that the 
entire sale price would be taxed, the cost basis was zero.  Even if I had put 
seed money into the company in the early days, those expenses had been used to 
offset revenue for tax purposes.  I had mistakenly thought only the difference 
between the sale price and what I had put into it would be taxed.

 

But I must be misunderstanding the depreciation recapture thing, especially 
since it sounds like it doesn’t matter if you expensed or depreciated the 
equipment, they want to tax all those expenses that were used in the 
profit=sales-expenses equation in previous tax years.

 

Ignoring the stuff we bought that has long since died or been retired and 
replaced with newer stuff, I usually figure the CPE plus a prorated share of 
the tower equipment costs almost a year of gross revenue per customer (we use 
Cambium 450 which is on the expensive side).  ARPU is climbing as less and less 
people take the lowest speed tier, but that is somewhat offset by small cells 
and less subs per AP, as well as moving toward all licensed backhauls.  But 
when customer pays $600/year and SM alone can cost $300 or more, then add in 
maybe 1/15 of an AP, and you’re somewhere between 0.5 and 1.0 times annual 
revenue invested in equipment.  (Then rinse and repeat every 3-5 years as 
equipment becomes obsolete.)

 

So if I sell and get, let’s just say 1x revenue, and then pay tax on the entire 
sale price, are they going to want to tax the equipment at what will probably 
be the highest marginal tax rate on top of that?  It seems entirely possible 
the taxes would eat up the entire sale price.  That can’t be right.  I must be 
misunderstanding something.

 

I also doubt many of us track every capital asset and when it gets replaced due 
to lightning, water intrusion, it becomes obsolete, or you just need something 
faster.  Like you replace Tranzeo with FSK with 430 with 450 with 450i with 
450m.  And while occasionally you might redeploy a piece of equipment to a 
smaller site, usually it becomes eWaste.  But if I had to document all that to 
avoid paying tax on every piece of equipment I ever bought, I’d be screwed, my 
asset records are not that detailed.

 

I’m also not clear on whether this only applies to large capital assets, or 
everything we ever expensed.  Like cable and mounts and POEs and antennas, and 
what about license keys for radios.  Like capacity keys or lite to full keys or 
all those keys you buy for a licensed link.

 

From: AF  On Behalf Of ch...@wbmfg.com
Sent: Saturday, August 22, 2020 4:19 PM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

+1^6

 

I like my books to be surgically accurate and very current.  I want to know 
exactly where we are every month.  I have a third column of class of expenses 
in my books.  Any of the crap I buy because I want to or I am experimenting or 
I think I can fix up an old piece of junk goes in the column.  Then it does not 
factor into my contracting or manufacturing profit and losses.  For example, 
almost every month manufacturing is in the black.  Once in a while we have 
delayed shipments put us in the red but the next month is it doing that much 
better.

 

Contracting comes and goes.  Some weeks I have the guys just doing work on the 
buildings and grounds.  I have them code their time so I can pull the non 
revenue producing payroll expenses out and see if they have a positive gross 
profit based on revenue producing projects.  

 

The thing I am always watching for is negative gross profit on a revenue job.  
That is a good way to go bankrupt.  And sometimes things go sideways on 
contracting and you do lose money.  

 

Then we look at all the below the line stuff and try to minimize that.  Always 
a challenge because most of that stuff is there month after month irrespective 
of revenue.

 

Then I can tell the various divisions how they are doing independently of the 
other divisions and independent of my

Re: [AFMUG] Buying and selling ISP’s

[chuck]

+1^6

I like my books to be surgically accurate and very current.  I want to know 
exactly where we are every month.  I have a third column of class of expenses 
in my books.  Any of the crap I buy because I want to or I am experimenting or 
I think I can fix up an old piece of junk goes in the column.  Then it does not 
factor into my contracting or manufacturing profit and losses.  For example, 
almost every month manufacturing is in the black.  Once in a while we have 
delayed shipments put us in the red but the next month is it doing that much 
better.

Contracting comes and goes.  Some weeks I have the guys just doing work on the 
buildings and grounds.  I have them code their time so I can pull the non 
revenue producing payroll expenses out and see if they have a positive gross 
profit based on revenue producing projects.  

The thing I am always watching for is negative gross profit on a revenue job.  
That is a good way to go bankrupt.  And sometimes things go sideways on 
contracting and you do lose money.  

Then we look at all the below the line stuff and try to minimize that.  Always 
a challenge because most of that stuff is there month after month irrespective 
of revenue.

Then I can tell the various divisions how they are doing independently of the 
other divisions and independent of my discretionary money wasting experimental 
stuff.  

From: Mark Radabaugh 
Sent: Saturday, August 22, 2020 2:52 PM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

I’m thinking y’all need to take a serious look at accounting and depreciation 
and what they mean.   

Depreciate equipment at your best estimate of the useful life of the equipment. 
 Keep your books accurate so that you know exactly what you are making (or not 
making).   That’s the entire point of accrual accounting and depreciation.   
It’s way to hard to tell what is happening when you don’t accurately track 
depreciation.

Work with your tax accountant to get your tax books and returns to minimize 
(but not eliminate) the taxes you owe.  You can certainly use Section 179 and 
other accelerated depreciation methods to reduce your tax liability but it 
needs to be done strategically.   Paying a little tax now can greatly reduce 
your taxes in the future.

The point is you need to have accurate accounting with realistic depreciation 
to sensibly run the business.Tax strategies are important, but nowhere near 
as important as knowing if you are really making money or not.

Mark


  On Aug 22, 2020, at 2:34 PM, Matt Hoppes  
wrote:

  That doesn’t make any sense. What am I missing?

  If I pay $50,000 for a truck and depreciate over 5 years I take $10,000 per 
year. 

  Why would I need to pay back anything if I sell in year 2?

  Or are we saying if I write off the entire $50,000 on day one on something 
you’d normally depreciate over 5 years and sell at year 2?


On Aug 22, 2020, at 2:30 PM, ch...@wbmfg.com wrote:


 
They assume if you ever took depreciation for anything, it was used as an 
offset for income tax you would have paid.  They want that back.  I presume 
stuff you junked does not count.  

From: Ken Hohhof 
Sent: Saturday, August 22, 2020 12:04 PM
To: 'AnimalFarm Microwave Users Group' 
Subject: Re: [AFMUG] Buying and selling ISP’s

Any WISP that has been around for 10+ years has probably expensed or 
depreciated several times as much equipment as is currently active in their 
network.

 

Do you have to identify which expensed or depreciated equipment is still in 
use and which went in the dumpster years ago?  And how do they determine what 
the sale price is for the purpose of seeing if it exceeds the depreciated cost? 
 Do they assume the entire sale price of the business was to acquire equipment?

 

Seems like you would be taxed twice, first for capital gains, then for the 
expenses you used to offset revenue for tax purposes.

 

I know most buyers prefer an asset sale to a stock sale, in case there are 
ghosts in the closets.  But would a stock sale avoid this problem?  Does it 
matter C Corp, S Corp or LLC?

 

 

From: AF  On Behalf Of ch...@wbmfg.com
Sent: Saturday, August 22, 2020 10:51 AM
To: 'AnimalFarm Microwave Users Group' 
    Subject: Re: [AFMUG] Buying and selling ISP’s

 

One concept that was new to me in my sale was depreciation recapture.  If 
you fully expense or 179 expense or if your equipment is old enough to have 
fully depreciated, all the depreciation expense comes back to bite you in the 
ass.  You will be taxed on it.  

 

From: Ken Hohhof 

Sent: Saturday, August 22, 2020 9:39 AM

To: 'AnimalFarm Microwave Users Group' 

    Subject: Re: [AFMUG] Buying and selling ISP’s

 

That is very dependent on whether the business is being run as “milking the 
cash cow” or “reinvesting to grow the business”.  Especially since sectio

Re: [AFMUG] Buying and selling ISP’s

[chuck]

You need to ask your accountant.  I know it was a huge phantom income for us.  

From: Tushar Patel 
Sent: Saturday, August 22, 2020 2:36 PM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

I am very curious on the subject of depreciation recapture. So, were you 
depreciating CPE?  

Even when you sold the company as $x /customer?

What happens on the fully depreciated CPE that is in still service? Is the full 
amount is captured?

What would have happened if you had expensed those CPE? 

The reason I am asking this is because accountant always says depreciate so you 
can look good to the bankers because you now have a large assets to show on the 
books, but it sounds to me if you ever plan to sell it can come and bite you 
with a large tax bill. 


Tushar 



  On Aug 22, 2020, at 1:30 PM, ch...@wbmfg.com wrote:


   
  They assume if you ever took depreciation for anything, it was used as an 
offset for income tax you would have paid.  They want that back.  I presume 
stuff you junked does not count.  

  From: Ken Hohhof 
  Sent: Saturday, August 22, 2020 12:04 PM
  To: 'AnimalFarm Microwave Users Group' 
  Subject: Re: [AFMUG] Buying and selling ISP’s

  Any WISP that has been around for 10+ years has probably expensed or 
depreciated several times as much equipment as is currently active in their 
network.

   

  Do you have to identify which expensed or depreciated equipment is still in 
use and which went in the dumpster years ago?  And how do they determine what 
the sale price is for the purpose of seeing if it exceeds the depreciated cost? 
 Do they assume the entire sale price of the business was to acquire equipment?

   

  Seems like you would be taxed twice, first for capital gains, then for the 
expenses you used to offset revenue for tax purposes.

   

  I know most buyers prefer an asset sale to a stock sale, in case there are 
ghosts in the closets.  But would a stock sale avoid this problem?  Does it 
matter C Corp, S Corp or LLC?

   

   

  From: AF  On Behalf Of ch...@wbmfg.com
  Sent: Saturday, August 22, 2020 10:51 AM
  To: 'AnimalFarm Microwave Users Group' 
  Subject: Re: [AFMUG] Buying and selling ISP’s

   

  One concept that was new to me in my sale was depreciation recapture.  If you 
fully expense or 179 expense or if your equipment is old enough to have fully 
depreciated, all the depreciation expense comes back to bite you in the ass.  
You will be taxed on it.  

   

  From: Ken Hohhof 

  Sent: Saturday, August 22, 2020 9:39 AM

  To: 'AnimalFarm Microwave Users Group' 

  Subject: Re: [AFMUG] Buying and selling ISP’s

   

  That is very dependent on whether the business is being run as “milking the 
cash cow” or “reinvesting to grow the business”.  Especially since section 179 
allows a lot of capital purchases to be expensed in the first year.

   

  I suspect many WISP owners prefer to add staff and equipment and towers and 
customers, rather than declare profits and pay taxes.  That doesn’t mean their 
businesses are worth less to a buyer.  Back when I worked for corporate 
America, I remember around 1990 working for a public high tech company and at 
stockholder meetings the CEO would be asked why the company at every earnings 
statement would just break even or a little more.  He would answer they were in 
business to grow, not to pay taxes.

   

  I am sometimes puzzled by competitors who seem to have crappy service, are 
hated by their customers, and have high churn.  Then I realize they are milking 
the cash cow, spending as little as possible, and probably making as much or 
more profit as I am.  In the case of big, crappy companies, they probably don’t 
sweat the churn because there are millions more suckers out there, you just 
need advertising to rope some of them in to replace the cancellations.  Like 
when asked about Frontier, I describe them as the slum landlord of phone 
companies.

   

   

  From: AF  On Behalf Of Chuck McCown
  Sent: Saturday, August 22, 2020 10:02 AM
  To: AnimalFarm Microwave Users Group 
  Subject: Re: [AFMUG] Buying and selling ISP’s

   

  Whatever 5x your earnings are.  Not sales or revenue or gross profit but 
bottom line earnings on your income statement/ pl. Your taxable income.

  Sent from my iPhone

   

On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:



What does the revenue multiplier end up being, though?

5x EBIDTA / revenue gets you what, in purchases that have been made?



-
Mike Hammett
Intelligent Computing Solutions

Midwest Internet Exchange

The Brothers WISP








From: "Chuck McCown" 
To: "AnimalFarm Microwave Users Group" 
Sent: Friday, August 21, 2020 8:20:47 PM
Subject: Re: [AFMUG] Buying and selling ISP’s

5 x ebidta

Revenue multiples are of no value.

Sent fro

Re: [AFMUG] Buying and selling ISP’s

[Mark Radabaugh]

It doesn’t matter if you sell the business or not for accelerated depreciation 
to bite you in the ass.

Say you spend $1M on equipment with a life of 3 years and depreciate it all 
this year.  Your profit without depreciation was 1M so you end up with a $0 tax 
bill.   Next year you make another million in profit but have no depreciation - 
now you have a million dollars you owe taxes on, rather than the 2/3M you would 
have otherwise.

Accelerated depreciation is just kicking the tax can down the road.  If the 
business is going in the toilet and you expect losses in the future then by all 
means - take the depreciation now.  If you think that you are going to make 
more profit in the future, accelerated depreciation isn’t a great plan.

Selling the business is just a form of making a lot of profit in one year.

Mark

> On Aug 22, 2020, at 4:36 PM, Tushar Patel  wrote:
> 
> I am very curious on the subject of depreciation recapture. So, were you 
> depreciating CPE? 
> 
> Even when you sold the company as $x /customer?
> 
> What happens on the fully depreciated CPE that is in still service? Is the 
> full amount is captured?
> 
> What would have happened if you had expensed those CPE? 
> 
> The reason I am asking this is because accountant always says depreciate so 
> you can look good to the bankers because you now have a large assets to show 
> on the books, but it sounds to me if you ever plan to sell it can come and 
> bite you with a large tax bill. 
> 
> 
> Tushar
> 
> 
>> On Aug 22, 2020, at 1:30 PM, ch...@wbmfg.com wrote:
>> 
>> 
>> They assume if you ever took depreciation for anything, it was used as an 
>> offset for income tax you would have paid.  They want that back.  I presume 
>> stuff you junked does not count. 
>>  
>> From: Ken Hohhof <>
>> Sent: Saturday, August 22, 2020 12:04 PM
>> To: 'AnimalFarm Microwave Users Group' <>
>> Subject: Re: [AFMUG] Buying and selling ISP’s
>>  
>> Any WISP that has been around for 10+ years has probably expensed or 
>> depreciated several times as much equipment as is currently active in their 
>> network.
>>  
>> Do you have to identify which expensed or depreciated equipment is still in 
>> use and which went in the dumpster years ago?  And how do they determine 
>> what the sale price is for the purpose of seeing if it exceeds the 
>> depreciated cost?  Do they assume the entire sale price of the business was 
>> to acquire equipment?
>>  
>> Seems like you would be taxed twice, first for capital gains, then for the 
>> expenses you used to offset revenue for tax purposes.
>>  
>> I know most buyers prefer an asset sale to a stock sale, in case there are 
>> ghosts in the closets.  But would a stock sale avoid this problem?  Does it 
>> matter C Corp, S Corp or LLC?
>>  
>>  
>> From: AF  On Behalf Of ch...@wbmfg.com
>> Sent: Saturday, August 22, 2020 10:51 AM
>> To: 'AnimalFarm Microwave Users Group' 
>> Subject: Re: [AFMUG] Buying and selling ISP’s
>>  
>> One concept that was new to me in my sale was depreciation recapture.  If 
>> you fully expense or 179 expense or if your equipment is old enough to have 
>> fully depreciated, all the depreciation expense comes back to bite you in 
>> the ass.  You will be taxed on it. 
>>  
>> From: Ken Hohhof
>> Sent: Saturday, August 22, 2020 9:39 AM
>> To: 'AnimalFarm Microwave Users Group'
>> Subject: Re: [AFMUG] Buying and selling ISP’s
>>  
>> That is very dependent on whether the business is being run as “milking the 
>> cash cow” or “reinvesting to grow the business”.  Especially since section 
>> 179 allows a lot of capital purchases to be expensed in the first year.
>>  
>> I suspect many WISP owners prefer to add staff and equipment and towers and 
>> customers, rather than declare profits and pay taxes.  That doesn’t mean 
>> their businesses are worth less to a buyer.  Back when I worked for 
>> corporate America, I remember around 1990 working for a public high tech 
>> company and at stockholder meetings the CEO would be asked why the company 
>> at every earnings statement would just break even or a little more.  He 
>> would answer they were in business to grow, not to pay taxes.
>>  
>> I am sometimes puzzled by competitors who seem to have crappy service, are 
>> hated by their customers, and have high churn.  Then I realize they are 
>> milking the cash cow, spending as little as possible, and probably making as 
>> much or more profit as I am.  In the case of big, crappy companies, they 
>> probably don’t sweat the

Re: [AFMUG] Buying and selling ISP’s

[Mark Radabaugh]

I’m thinking y’all need to take a serious look at accounting and depreciation 
and what they mean.  

Depreciate equipment at your best estimate of the useful life of the equipment. 
 Keep your books accurate so that you know exactly what you are making (or not 
making).   That’s the entire point of accrual accounting and depreciation.   
It’s way to hard to tell what is happening when you don’t accurately track 
depreciation.

Work with your tax accountant to get your tax books and returns to minimize 
(but not eliminate) the taxes you owe.  You can certainly use Section 179 and 
other accelerated depreciation methods to reduce your tax liability but it 
needs to be done strategically.   Paying a little tax now can greatly reduce 
your taxes in the future.

The point is you need to have accurate accounting with realistic depreciation 
to sensibly run the business.Tax strategies are important, but nowhere near 
as important as knowing if you are really making money or not.

Mark

> On Aug 22, 2020, at 2:34 PM, Matt Hoppes  
> wrote:
> 
> That doesn’t make any sense. What am I missing?
> 
> If I pay $50,000 for a truck and depreciate over 5 years I take $10,000 per 
> year. 
> 
> Why would I need to pay back anything if I sell in year 2?
> 
> Or are we saying if I write off the entire $50,000 on day one on something 
> you’d normally depreciate over 5 years and sell at year 2?
> 
>> On Aug 22, 2020, at 2:30 PM, ch...@wbmfg.com wrote:
>> 
>> 
>> They assume if you ever took depreciation for anything, it was used as an 
>> offset for income tax you would have paid.  They want that back.  I presume 
>> stuff you junked does not count. 
>>  
>> From: Ken Hohhof <>
>> Sent: Saturday, August 22, 2020 12:04 PM
>> To: 'AnimalFarm Microwave Users Group' <>
>> Subject: Re: [AFMUG] Buying and selling ISP’s
>>  
>> Any WISP that has been around for 10+ years has probably expensed or 
>> depreciated several times as much equipment as is currently active in their 
>> network.
>>  
>> Do you have to identify which expensed or depreciated equipment is still in 
>> use and which went in the dumpster years ago?  And how do they determine 
>> what the sale price is for the purpose of seeing if it exceeds the 
>> depreciated cost?  Do they assume the entire sale price of the business was 
>> to acquire equipment?
>>  
>> Seems like you would be taxed twice, first for capital gains, then for the 
>> expenses you used to offset revenue for tax purposes.
>>  
>> I know most buyers prefer an asset sale to a stock sale, in case there are 
>> ghosts in the closets.  But would a stock sale avoid this problem?  Does it 
>> matter C Corp, S Corp or LLC?
>>  
>>  
>> From: AF  On Behalf Of ch...@wbmfg.com
>> Sent: Saturday, August 22, 2020 10:51 AM
>> To: 'AnimalFarm Microwave Users Group' 
>> Subject: Re: [AFMUG] Buying and selling ISP’s
>>  
>> One concept that was new to me in my sale was depreciation recapture.  If 
>> you fully expense or 179 expense or if your equipment is old enough to have 
>> fully depreciated, all the depreciation expense comes back to bite you in 
>> the ass.  You will be taxed on it. 
>>  
>> From: Ken Hohhof
>> Sent: Saturday, August 22, 2020 9:39 AM
>> To: 'AnimalFarm Microwave Users Group'
>> Subject: Re: [AFMUG] Buying and selling ISP’s
>>  
>> That is very dependent on whether the business is being run as “milking the 
>> cash cow” or “reinvesting to grow the business”.  Especially since section 
>> 179 allows a lot of capital purchases to be expensed in the first year.
>>  
>> I suspect many WISP owners prefer to add staff and equipment and towers and 
>> customers, rather than declare profits and pay taxes.  That doesn’t mean 
>> their businesses are worth less to a buyer.  Back when I worked for 
>> corporate America, I remember around 1990 working for a public high tech 
>> company and at stockholder meetings the CEO would be asked why the company 
>> at every earnings statement would just break even or a little more.  He 
>> would answer they were in business to grow, not to pay taxes.
>>  
>> I am sometimes puzzled by competitors who seem to have crappy service, are 
>> hated by their customers, and have high churn.  Then I realize they are 
>> milking the cash cow, spending as little as possible, and probably making as 
>> much or more profit as I am.  In the case of big, crappy companies, they 
>> probably don’t sweat the churn because there are millions more suckers out 
>> there, you just need advertising to rope some of them in to

Re: [AFMUG] Buying and selling ISP’s

[Tushar Patel]

I am very curious on the subject of depreciation recapture. So, were you 
depreciating CPE? 

Even when you sold the company as $x /customer?

What happens on the fully depreciated CPE that is in still service? Is the full 
amount is captured?

What would have happened if you had expensed those CPE? 

The reason I am asking this is because accountant always says depreciate so you 
can look good to the bankers because you now have a large assets to show on the 
books, but it sounds to me if you ever plan to sell it can come and bite you 
with a large tax bill. 


Tushar


> On Aug 22, 2020, at 1:30 PM, ch...@wbmfg.com wrote:
> 
> 
> They assume if you ever took depreciation for anything, it was used as an 
> offset for income tax you would have paid.  They want that back.  I presume 
> stuff you junked does not count. 
>  
> From: Ken Hohhof
> Sent: Saturday, August 22, 2020 12:04 PM
> To: 'AnimalFarm Microwave Users Group'
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> Any WISP that has been around for 10+ years has probably expensed or 
> depreciated several times as much equipment as is currently active in their 
> network.
>  
> Do you have to identify which expensed or depreciated equipment is still in 
> use and which went in the dumpster years ago?  And how do they determine what 
> the sale price is for the purpose of seeing if it exceeds the depreciated 
> cost?  Do they assume the entire sale price of the business was to acquire 
> equipment?
>  
> Seems like you would be taxed twice, first for capital gains, then for the 
> expenses you used to offset revenue for tax purposes.
>  
> I know most buyers prefer an asset sale to a stock sale, in case there are 
> ghosts in the closets.  But would a stock sale avoid this problem?  Does it 
> matter C Corp, S Corp or LLC?
>  
>  
> From: AF  On Behalf Of ch...@wbmfg.com
> Sent: Saturday, August 22, 2020 10:51 AM
> To: 'AnimalFarm Microwave Users Group' 
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> One concept that was new to me in my sale was depreciation recapture.  If you 
> fully expense or 179 expense or if your equipment is old enough to have fully 
> depreciated, all the depreciation expense comes back to bite you in the ass.  
> You will be taxed on it. 
>  
> From: Ken Hohhof
> Sent: Saturday, August 22, 2020 9:39 AM
> To: 'AnimalFarm Microwave Users Group'
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> That is very dependent on whether the business is being run as “milking the 
> cash cow” or “reinvesting to grow the business”.  Especially since section 
> 179 allows a lot of capital purchases to be expensed in the first year.
>  
> I suspect many WISP owners prefer to add staff and equipment and towers and 
> customers, rather than declare profits and pay taxes.  That doesn’t mean 
> their businesses are worth less to a buyer.  Back when I worked for corporate 
> America, I remember around 1990 working for a public high tech company and at 
> stockholder meetings the CEO would be asked why the company at every earnings 
> statement would just break even or a little more.  He would answer they were 
> in business to grow, not to pay taxes.
>  
> I am sometimes puzzled by competitors who seem to have crappy service, are 
> hated by their customers, and have high churn.  Then I realize they are 
> milking the cash cow, spending as little as possible, and probably making as 
> much or more profit as I am.  In the case of big, crappy companies, they 
> probably don’t sweat the churn because there are millions more suckers out 
> there, you just need advertising to rope some of them in to replace the 
> cancellations.  Like when asked about Frontier, I describe them as the slum 
> landlord of phone companies.
>  
>  
> From: AF  On Behalf Of Chuck McCown
> Sent: Saturday, August 22, 2020 10:02 AM
> To: AnimalFarm Microwave Users Group 
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> Whatever 5x your earnings are.  Not sales or revenue or gross profit but 
> bottom line earnings on your income statement/ pl. Your taxable income.
> 
> Sent from my iPhone
>  
> 
> On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:
> 
> 
> What does the revenue multiplier end up being, though?
> 
> 5x EBIDTA / revenue gets you what, in purchases that have been made?
> 
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Friday, August 21, 2020 8:20:47 PM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> 5 x ebidta
> Revenue multiples 

Re: [AFMUG] Buying and selling ISP’s

[chuck]

In the acquisitions I did, I only looked at the value of the customer account, 
and in the cases where they were canopy I sweetened it.  But all of those were 
in my existing service territories.  

I didn’t take any of their other company assets or employees.  

But I have bought companies lock stock and barrel.  Those were valued on an 
income and asset approach after having audited financials for a couple of years 
to examine.  In one case the financials had been cooked and I got screwed.  

From: Lewis Bergman 
Sent: Saturday, August 22, 2020 1:15 PM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

Very few want to buy a company for reasons you already laid out. I also found 
from a different corporate sale that if they buy the company they seem to 
discount the price about 25 to 30%. looking at it both ways it didn't seem to 
make much difference.

On Sat, Aug 22, 2020 at 2:12 PM Chuck McCown  wrote:

  Depends on whether you are buying the whole company or just the subs and 
useful infrastructure.  


  Sent from my iPhone


On Aug 22, 2020, at 1:09 PM, Ken Hohhof  wrote:


 
If they thought it would be like the consolidation of the cable TV 
franchises, you were paying a multiple of revenue.  But cable companies 
typically don’t compete with each other, you are getting essentially a local 
monopoly, so it’s more realistic to think you are buying customers, and will 
get that revenue for 10+ years.  Also don’t typically expect the government to 
pay someone to overbuild you.



Closest thing today is probably fiber.  I don’t think fixed wireless is 
like that, certainly not in unlicensed spectrum.  Very little barrier to entry. 
 And if your service stinks, the competition will smell blood and start direct 
mail and door-to-door marketing campaigns.  I think some even have installers 
following the door knockers offering to hook you up same day.  Installs can go 
quick if there’s already a mount and cable you can use.



Sometimes buyers will say they pay more if the subs have all signed term 
contracts, but how long does that last?  And if service declines after the 
sale, many customers will say that contract was with the previous company not 
you.





From: AF  On Behalf Of Bill Prince
Sent: Saturday, August 22, 2020 1:45 PM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s



Buyers with too much funny money, or I'm missing something. I guess if 
you're coming in as the 800 lb gorilla, you can cut some corners.




--

bp

part15sbs{at}gmail{dot}com





On Sat, Aug 22, 2020 at 11:41 AM Lewis Bergman  
wrote:

  When we sold to JAB they would put the amount in whatever terms you 
wanted it in. If you wanted to talk EBITDA, they would. If you wanted to talk 
gross, they would. The number was always the same, they just made their method 
fit your expectations. I got to know Jeff a little bit and from what I gathered 
they normally thought about it internally as gross revenue multiples. They were 
going to tear your business apart anyway so the expense side of things, other 
than assumed obligations, didn't make much difference to them.



  On Sat, Aug 22, 2020 at 1:04 PM Ken Hohhof  wrote:

Any WISP that has been around for 10+ years has probably expensed or 
depreciated several times as much equipment as is currently active in their 
network.



Do you have to identify which expensed or depreciated equipment is 
still in use and which went in the dumpster years ago?  And how do they 
determine what the sale price is for the purpose of seeing if it exceeds the 
depreciated cost?  Do they assume the entire sale price of the business was to 
acquire equipment?



Seems like you would be taxed twice, first for capital gains, then for 
the expenses you used to offset revenue for tax purposes.



I know most buyers prefer an asset sale to a stock sale, in case there 
are ghosts in the closets.  But would a stock sale avoid this problem?  Does it 
matter C Corp, S Corp or LLC?





From: AF  On Behalf Of ch...@wbmfg.com
Sent: Saturday, August 22, 2020 10:51 AM
To: 'AnimalFarm Microwave Users Group' 
    Subject: Re: [AFMUG] Buying and selling ISP’s



One concept that was new to me in my sale was depreciation recapture.  
If you fully expense or 179 expense or if your equipment is old enough to have 
fully depreciated, all the depreciation expense comes back to bite you in the 
ass.  You will be taxed on it.  



From: Ken Hohhof 

Sent: Saturday, August 22, 2020 9:39 AM

To: 'AnimalFarm Microwave Users Group' 

    Subject: Re: [AFMUG] Buying and selling ISP’s



That is very dependent on whether the business is being run as “milking 
the cash cow” or “reinvesting to grow the business”.  Especially since section 
179 allows a

Re: [AFMUG] Buying and selling ISP’s

[Lewis Bergman]

Very few want to buy a company for reasons you already laid out. I also
found from a different corporate sale that if they buy the company they
seem to discount the price about 25 to 30%. looking at it both ways it
didn't seem to make much difference.

On Sat, Aug 22, 2020 at 2:12 PM Chuck McCown  wrote:

> Depends on whether you are buying the whole company or just the subs and
> useful infrastructure.
>
> Sent from my iPhone
>
> On Aug 22, 2020, at 1:09 PM, Ken Hohhof  wrote:
>
> 
>
> If they thought it would be like the consolidation of the cable TV
> franchises, you were paying a multiple of revenue.  But cable companies
> typically don’t compete with each other, you are getting essentially a
> local monopoly, so it’s more realistic to think you are buying customers,
> and will get that revenue for 10+ years.  Also don’t typically expect the
> government to pay someone to overbuild you.
>
>
>
> Closest thing today is probably fiber.  I don’t think fixed wireless is
> like that, certainly not in unlicensed spectrum.  Very little barrier to
> entry.  And if your service stinks, the competition will smell blood and
> start direct mail and door-to-door marketing campaigns.  I think some even
> have installers following the door knockers offering to hook you up same
> day.  Installs can go quick if there’s already a mount and cable you can
> use.
>
>
>
> Sometimes buyers will say they pay more if the subs have all signed term
> contracts, but how long does that last?  And if service declines after the
> sale, many customers will say that contract was with the previous company
> not you.
>
>
>
>
>
> *From:* AF  *On Behalf Of *Bill Prince
> *Sent:* Saturday, August 22, 2020 1:45 PM
> *To:* AnimalFarm Microwave Users Group 
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> Buyers with too much funny money, or I'm missing something. I guess if
> you're coming in as the 800 lb gorilla, you can cut some corners.
>
>
> --
>
> bp
>
> part15sbs{at}gmail{dot}com
>
>
>
>
>
> On Sat, Aug 22, 2020 at 11:41 AM Lewis Bergman 
> wrote:
>
> When we sold to JAB they would put the amount in whatever terms you wanted
> it in. If you wanted to talk EBITDA, they would. If you wanted to talk
> gross, they would. The number was always the same, they just made their
> method fit your expectations. I got to know Jeff a little bit and from what
> I gathered they normally thought about it internally as gross revenue
> multiples. They were going to tear your business apart anyway so the
> expense side of things, other than assumed obligations, didn't make much
> difference to them.
>
>
>
> On Sat, Aug 22, 2020 at 1:04 PM Ken Hohhof  wrote:
>
> Any WISP that has been around for 10+ years has probably expensed or
> depreciated several times as much equipment as is currently active in their
> network.
>
>
>
> Do you have to identify which expensed or depreciated equipment is still
> in use and which went in the dumpster years ago?  And how do they determine
> what the sale price is for the purpose of seeing if it exceeds the
> depreciated cost?  Do they assume the entire sale price of the business was
> to acquire equipment?
>
>
>
> Seems like you would be taxed twice, first for capital gains, then for the
> expenses you used to offset revenue for tax purposes.
>
>
>
> I know most buyers prefer an asset sale to a stock sale, in case there are
> ghosts in the closets.  But would a stock sale avoid this problem?  Does it
> matter C Corp, S Corp or LLC?
>
>
>
>
>
> *From:* AF  *On Behalf Of *ch...@wbmfg.com
> *Sent:* Saturday, August 22, 2020 10:51 AM
> *To:* 'AnimalFarm Microwave Users Group' 
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> One concept that was new to me in my sale was depreciation recapture.  If
> you fully expense or 179 expense or if your equipment is old enough to have
> fully depreciated, all the depreciation expense comes back to bite you in
> the ass.  You will be taxed on it.
>
>
>
> *From:* Ken Hohhof
>
> *Sent:* Saturday, August 22, 2020 9:39 AM
>
> *To:* 'AnimalFarm Microwave Users Group'
>
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> That is very dependent on whether the business is being run as “milking
> the cash cow” or “reinvesting to grow the business”.  Especially since
> section 179 allows a lot of capital purchases to be expensed in the first
> year.
>
>
>
> I suspect many WISP owners prefer to add staff and equipment and towers
> and customers, rather than declare profits and pay taxes.  That doesn’t
> mean their businesses are worth 

Re: [AFMUG] Buying and selling ISP’s

[Chuck McCown]

Depends on whether you are buying the whole company or just the subs and useful 
infrastructure.  

Sent from my iPhone

> On Aug 22, 2020, at 1:09 PM, Ken Hohhof  wrote:
> 
> 
> If they thought it would be like the consolidation of the cable TV 
> franchises, you were paying a multiple of revenue.  But cable companies 
> typically don’t compete with each other, you are getting essentially a local 
> monopoly, so it’s more realistic to think you are buying customers, and will 
> get that revenue for 10+ years.  Also don’t typically expect the government 
> to pay someone to overbuild you.
>  
> Closest thing today is probably fiber.  I don’t think fixed wireless is like 
> that, certainly not in unlicensed spectrum.  Very little barrier to entry.  
> And if your service stinks, the competition will smell blood and start direct 
> mail and door-to-door marketing campaigns.  I think some even have installers 
> following the door knockers offering to hook you up same day.  Installs can 
> go quick if there’s already a mount and cable you can use.
>  
> Sometimes buyers will say they pay more if the subs have all signed term 
> contracts, but how long does that last?  And if service declines after the 
> sale, many customers will say that contract was with the previous company not 
> you.
>  
>  
> From: AF  On Behalf Of Bill Prince
> Sent: Saturday, August 22, 2020 1:45 PM
> To: AnimalFarm Microwave Users Group 
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> Buyers with too much funny money, or I'm missing something. I guess if you're 
> coming in as the 800 lb gorilla, you can cut some corners.
> 
> --
> bp
> part15sbs{at}gmail{dot}com
>  
>  
> On Sat, Aug 22, 2020 at 11:41 AM Lewis Bergman  
> wrote:
> When we sold to JAB they would put the amount in whatever terms you wanted it 
> in. If you wanted to talk EBITDA, they would. If you wanted to talk gross, 
> they would. The number was always the same, they just made their method fit 
> your expectations. I got to know Jeff a little bit and from what I gathered 
> they normally thought about it internally as gross revenue multiples. They 
> were going to tear your business apart anyway so the expense side of things, 
> other than assumed obligations, didn't make much difference to them.
>  
> On Sat, Aug 22, 2020 at 1:04 PM Ken Hohhof  wrote:
> Any WISP that has been around for 10+ years has probably expensed or 
> depreciated several times as much equipment as is currently active in their 
> network.
>  
> Do you have to identify which expensed or depreciated equipment is still in 
> use and which went in the dumpster years ago?  And how do they determine what 
> the sale price is for the purpose of seeing if it exceeds the depreciated 
> cost?  Do they assume the entire sale price of the business was to acquire 
> equipment?
>  
> Seems like you would be taxed twice, first for capital gains, then for the 
> expenses you used to offset revenue for tax purposes.
>  
> I know most buyers prefer an asset sale to a stock sale, in case there are 
> ghosts in the closets.  But would a stock sale avoid this problem?  Does it 
> matter C Corp, S Corp or LLC?
>  
>  
> From: AF  On Behalf Of ch...@wbmfg.com
> Sent: Saturday, August 22, 2020 10:51 AM
> To: 'AnimalFarm Microwave Users Group' 
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> One concept that was new to me in my sale was depreciation recapture.  If you 
> fully expense or 179 expense or if your equipment is old enough to have fully 
> depreciated, all the depreciation expense comes back to bite you in the ass.  
> You will be taxed on it. 
>  
> From: Ken Hohhof
> Sent: Saturday, August 22, 2020 9:39 AM
> To: 'AnimalFarm Microwave Users Group'
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> That is very dependent on whether the business is being run as “milking the 
> cash cow” or “reinvesting to grow the business”.  Especially since section 
> 179 allows a lot of capital purchases to be expensed in the first year.
>  
> I suspect many WISP owners prefer to add staff and equipment and towers and 
> customers, rather than declare profits and pay taxes.  That doesn’t mean 
> their businesses are worth less to a buyer.  Back when I worked for corporate 
> America, I remember around 1990 working for a public high tech company and at 
> stockholder meetings the CEO would be asked why the company at every earnings 
> statement would just break even or a little more.  He would answer they were 
> in business to grow, not to pay taxes.
>  
> I am sometimes puzzled by competitors who seem to have crappy service, are 
> hated by their customers, and have high churn.  Then I real

Re: [AFMUG] Buying and selling ISP’s

[Ken Hohhof]

If they thought it would be like the consolidation of the cable TV franchises, 
you were paying a multiple of revenue.  But cable companies typically don’t 
compete with each other, you are getting essentially a local monopoly, so it’s 
more realistic to think you are buying customers, and will get that revenue for 
10+ years.  Also don’t typically expect the government to pay someone to 
overbuild you.

 

Closest thing today is probably fiber.  I don’t think fixed wireless is like 
that, certainly not in unlicensed spectrum.  Very little barrier to entry.  And 
if your service stinks, the competition will smell blood and start direct mail 
and door-to-door marketing campaigns.  I think some even have installers 
following the door knockers offering to hook you up same day.  Installs can go 
quick if there’s already a mount and cable you can use.

 

Sometimes buyers will say they pay more if the subs have all signed term 
contracts, but how long does that last?  And if service declines after the 
sale, many customers will say that contract was with the previous company not 
you.

 

 

From: AF  On Behalf Of Bill Prince
Sent: Saturday, August 22, 2020 1:45 PM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

Buyers with too much funny money, or I'm missing something. I guess if you're 
coming in as the 800 lb gorilla, you can cut some corners.




--

bp

part15sbs{at}gmail{dot}com

 

 

On Sat, Aug 22, 2020 at 11:41 AM Lewis Bergman mailto:lewis.berg...@gmail.com> > wrote:

When we sold to JAB they would put the amount in whatever terms you wanted it 
in. If you wanted to talk EBITDA, they would. If you wanted to talk gross, they 
would. The number was always the same, they just made their method fit your 
expectations. I got to know Jeff a little bit and from what I gathered they 
normally thought about it internally as gross revenue multiples. They were 
going to tear your business apart anyway so the expense side of things, other 
than assumed obligations, didn't make much difference to them.

 

On Sat, Aug 22, 2020 at 1:04 PM Ken Hohhof mailto:af...@kwisp.com> > wrote:

Any WISP that has been around for 10+ years has probably expensed or 
depreciated several times as much equipment as is currently active in their 
network.

 

Do you have to identify which expensed or depreciated equipment is still in use 
and which went in the dumpster years ago?  And how do they determine what the 
sale price is for the purpose of seeing if it exceeds the depreciated cost?  Do 
they assume the entire sale price of the business was to acquire equipment?

 

Seems like you would be taxed twice, first for capital gains, then for the 
expenses you used to offset revenue for tax purposes.

 

I know most buyers prefer an asset sale to a stock sale, in case there are 
ghosts in the closets.  But would a stock sale avoid this problem?  Does it 
matter C Corp, S Corp or LLC?

 

 

From: AF mailto:af-boun...@af.afmug.com> > On Behalf 
Of ch...@wbmfg.com <mailto:ch...@wbmfg.com> 
Sent: Saturday, August 22, 2020 10:51 AM
To: 'AnimalFarm Microwave Users Group' mailto:af@af.afmug.com> >
Subject: Re: [AFMUG] Buying and selling ISP’s

 

One concept that was new to me in my sale was depreciation recapture.  If you 
fully expense or 179 expense or if your equipment is old enough to have fully 
depreciated, all the depreciation expense comes back to bite you in the ass.  
You will be taxed on it.  

 

From: Ken Hohhof 

Sent: Saturday, August 22, 2020 9:39 AM

To: 'AnimalFarm Microwave Users Group' 

Subject: Re: [AFMUG] Buying and selling ISP’s

 

That is very dependent on whether the business is being run as “milking the 
cash cow” or “reinvesting to grow the business”.  Especially since section 179 
allows a lot of capital purchases to be expensed in the first year.

 

I suspect many WISP owners prefer to add staff and equipment and towers and 
customers, rather than declare profits and pay taxes.  That doesn’t mean their 
businesses are worth less to a buyer.  Back when I worked for corporate 
America, I remember around 1990 working for a public high tech company and at 
stockholder meetings the CEO would be asked why the company at every earnings 
statement would just break even or a little more.  He would answer they were in 
business to grow, not to pay taxes.

 

I am sometimes puzzled by competitors who seem to have crappy service, are 
hated by their customers, and have high churn.  Then I realize they are milking 
the cash cow, spending as little as possible, and probably making as much or 
more profit as I am.  In the case of big, crappy companies, they probably don’t 
sweat the churn because there are millions more suckers out there, you just 
need advertising to rope some of them in to replace the cancellations.  Like 
when asked about Frontier, I describe them as the slum landlord of phone 
companies.

 

Re: [AFMUG] Buying and selling ISP’s

[Chuck McCown]

Yes, they will charge you for depreciation claimed but not earned.

Sent from my iPhone

> On Aug 22, 2020, at 12:35 PM, Matt Hoppes  
> wrote:
> 
> 
> That doesn’t make any sense. What am I missing?
> 
> If I pay $50,000 for a truck and depreciate over 5 years I take $10,000 per 
> year. 
> 
> Why would I need to pay back anything if I sell in year 2?
> 
> Or are we saying if I write off the entire $50,000 on day one on something 
> you’d normally depreciate over 5 years and sell at year 2?
> 
>>> On Aug 22, 2020, at 2:30 PM, ch...@wbmfg.com wrote:
>>> 
>> 
>> They assume if you ever took depreciation for anything, it was used as an 
>> offset for income tax you would have paid.  They want that back.  I presume 
>> stuff you junked does not count. 
>>  
>> From: Ken Hohhof
>> Sent: Saturday, August 22, 2020 12:04 PM
>> To: 'AnimalFarm Microwave Users Group'
>> Subject: Re: [AFMUG] Buying and selling ISP’s
>>  
>> Any WISP that has been around for 10+ years has probably expensed or 
>> depreciated several times as much equipment as is currently active in their 
>> network.
>>  
>> Do you have to identify which expensed or depreciated equipment is still in 
>> use and which went in the dumpster years ago?  And how do they determine 
>> what the sale price is for the purpose of seeing if it exceeds the 
>> depreciated cost?  Do they assume the entire sale price of the business was 
>> to acquire equipment?
>>  
>> Seems like you would be taxed twice, first for capital gains, then for the 
>> expenses you used to offset revenue for tax purposes.
>>  
>> I know most buyers prefer an asset sale to a stock sale, in case there are 
>> ghosts in the closets.  But would a stock sale avoid this problem?  Does it 
>> matter C Corp, S Corp or LLC?
>>  
>>  
>> From: AF  On Behalf Of ch...@wbmfg.com
>> Sent: Saturday, August 22, 2020 10:51 AM
>> To: 'AnimalFarm Microwave Users Group' 
>> Subject: Re: [AFMUG] Buying and selling ISP’s
>>  
>> One concept that was new to me in my sale was depreciation recapture.  If 
>> you fully expense or 179 expense or if your equipment is old enough to have 
>> fully depreciated, all the depreciation expense comes back to bite you in 
>> the ass.  You will be taxed on it. 
>>  
>> From: Ken Hohhof
>> Sent: Saturday, August 22, 2020 9:39 AM
>> To: 'AnimalFarm Microwave Users Group'
>> Subject: Re: [AFMUG] Buying and selling ISP’s
>>  
>> That is very dependent on whether the business is being run as “milking the 
>> cash cow” or “reinvesting to grow the business”.  Especially since section 
>> 179 allows a lot of capital purchases to be expensed in the first year.
>>  
>> I suspect many WISP owners prefer to add staff and equipment and towers and 
>> customers, rather than declare profits and pay taxes.  That doesn’t mean 
>> their businesses are worth less to a buyer.  Back when I worked for 
>> corporate America, I remember around 1990 working for a public high tech 
>> company and at stockholder meetings the CEO would be asked why the company 
>> at every earnings statement would just break even or a little more.  He 
>> would answer they were in business to grow, not to pay taxes.
>>  
>> I am sometimes puzzled by competitors who seem to have crappy service, are 
>> hated by their customers, and have high churn.  Then I realize they are 
>> milking the cash cow, spending as little as possible, and probably making as 
>> much or more profit as I am.  In the case of big, crappy companies, they 
>> probably don’t sweat the churn because there are millions more suckers out 
>> there, you just need advertising to rope some of them in to replace the 
>> cancellations.  Like when asked about Frontier, I describe them as the slum 
>> landlord of phone companies.
>>  
>>  
>> From: AF  On Behalf Of Chuck McCown
>> Sent: Saturday, August 22, 2020 10:02 AM
>> To: AnimalFarm Microwave Users Group 
>> Subject: Re: [AFMUG] Buying and selling ISP’s
>>  
>> Whatever 5x your earnings are.  Not sales or revenue or gross profit but 
>> bottom line earnings on your income statement/ pl. Your taxable income.
>> 
>> Sent from my iPhone
>>  
>> 
>> On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:
>> 
>> 
>> What does the revenue multiplier end up being, though?
>> 
>> 5x EBIDTA / revenue gets you what, in purchases that have been made?
>> 
>> 
>> 
>> -
>> Mike Hammett
>> Intelligent Comp

Re: [AFMUG] Buying and selling ISP’s

[Bill Prince]

Buyers with too much funny money, or I'm missing something. I guess if
you're coming in as the 800 lb gorilla, you can cut some corners.

--
bp
part15sbs{at}gmail{dot}com


On Sat, Aug 22, 2020 at 11:41 AM Lewis Bergman 
wrote:

> When we sold to JAB they would put the amount in whatever terms you wanted
> it in. If you wanted to talk EBITDA, they would. If you wanted to talk
> gross, they would. The number was always the same, they just made their
> method fit your expectations. I got to know Jeff a little bit and from what
> I gathered they normally thought about it internally as gross revenue
> multiples. They were going to tear your business apart anyway so the
> expense side of things, other than assumed obligations, didn't make much
> difference to them.
>
> On Sat, Aug 22, 2020 at 1:04 PM Ken Hohhof  wrote:
>
>> Any WISP that has been around for 10+ years has probably expensed or
>> depreciated several times as much equipment as is currently active in their
>> network.
>>
>>
>>
>> Do you have to identify which expensed or depreciated equipment is still
>> in use and which went in the dumpster years ago?  And how do they determine
>> what the sale price is for the purpose of seeing if it exceeds the
>> depreciated cost?  Do they assume the entire sale price of the business was
>> to acquire equipment?
>>
>>
>>
>> Seems like you would be taxed twice, first for capital gains, then for
>> the expenses you used to offset revenue for tax purposes.
>>
>>
>>
>> I know most buyers prefer an asset sale to a stock sale, in case there
>> are ghosts in the closets.  But would a stock sale avoid this problem?
>> Does it matter C Corp, S Corp or LLC?
>>
>>
>>
>>
>>
>> *From:* AF  *On Behalf Of *ch...@wbmfg.com
>> *Sent:* Saturday, August 22, 2020 10:51 AM
>> *To:* 'AnimalFarm Microwave Users Group' 
>> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>>
>>
>>
>> One concept that was new to me in my sale was depreciation recapture.  If
>> you fully expense or 179 expense or if your equipment is old enough to have
>> fully depreciated, all the depreciation expense comes back to bite you in
>> the ass.  You will be taxed on it.
>>
>>
>>
>> *From:* Ken Hohhof
>>
>> *Sent:* Saturday, August 22, 2020 9:39 AM
>>
>> *To:* 'AnimalFarm Microwave Users Group'
>>
>> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>>
>>
>>
>> That is very dependent on whether the business is being run as “milking
>> the cash cow” or “reinvesting to grow the business”.  Especially since
>> section 179 allows a lot of capital purchases to be expensed in the first
>> year.
>>
>>
>>
>> I suspect many WISP owners prefer to add staff and equipment and towers
>> and customers, rather than declare profits and pay taxes.  That doesn’t
>> mean their businesses are worth less to a buyer.  Back when I worked for
>> corporate America, I remember around 1990 working for a public high tech
>> company and at stockholder meetings the CEO would be asked why the company
>> at every earnings statement would just break even or a little more.  He
>> would answer they were in business to grow, not to pay taxes.
>>
>>
>>
>> I am sometimes puzzled by competitors who seem to have crappy service,
>> are hated by their customers, and have high churn.  Then I realize they are
>> milking the cash cow, spending as little as possible, and probably making
>> as much or more profit as I am.  In the case of big, crappy companies, they
>> probably don’t sweat the churn because there are millions more suckers out
>> there, you just need advertising to rope some of them in to replace the
>> cancellations.  Like when asked about Frontier, I describe them as the slum
>> landlord of phone companies.
>>
>>
>>
>>
>>
>> *From:* AF  *On Behalf Of *Chuck McCown
>> *Sent:* Saturday, August 22, 2020 10:02 AM
>> *To:* AnimalFarm Microwave Users Group 
>> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>>
>>
>>
>> Whatever 5x your earnings are.  Not sales or revenue or gross profit but
>> bottom line earnings on your income statement/ pl. Your taxable income.
>>
>> Sent from my iPhone
>>
>>
>>
>> On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:
>>
>> 
>>
>> What does the revenue multiplier end up being, though?
>>
>> 5x EBIDTA / revenue gets you what, in purchases that have been made?
>>
>>
>>
>>

Re: [AFMUG] Buying and selling ISP’s

[Lewis Bergman]

When we sold to JAB they would put the amount in whatever terms you wanted
it in. If you wanted to talk EBITDA, they would. If you wanted to talk
gross, they would. The number was always the same, they just made their
method fit your expectations. I got to know Jeff a little bit and from what
I gathered they normally thought about it internally as gross revenue
multiples. They were going to tear your business apart anyway so the
expense side of things, other than assumed obligations, didn't make much
difference to them.

On Sat, Aug 22, 2020 at 1:04 PM Ken Hohhof  wrote:

> Any WISP that has been around for 10+ years has probably expensed or
> depreciated several times as much equipment as is currently active in their
> network.
>
>
>
> Do you have to identify which expensed or depreciated equipment is still
> in use and which went in the dumpster years ago?  And how do they determine
> what the sale price is for the purpose of seeing if it exceeds the
> depreciated cost?  Do they assume the entire sale price of the business was
> to acquire equipment?
>
>
>
> Seems like you would be taxed twice, first for capital gains, then for the
> expenses you used to offset revenue for tax purposes.
>
>
>
> I know most buyers prefer an asset sale to a stock sale, in case there are
> ghosts in the closets.  But would a stock sale avoid this problem?  Does it
> matter C Corp, S Corp or LLC?
>
>
>
>
>
> *From:* AF  *On Behalf Of *ch...@wbmfg.com
> *Sent:* Saturday, August 22, 2020 10:51 AM
> *To:* 'AnimalFarm Microwave Users Group' 
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> One concept that was new to me in my sale was depreciation recapture.  If
> you fully expense or 179 expense or if your equipment is old enough to have
> fully depreciated, all the depreciation expense comes back to bite you in
> the ass.  You will be taxed on it.
>
>
>
> *From:* Ken Hohhof
>
> *Sent:* Saturday, August 22, 2020 9:39 AM
>
> *To:* 'AnimalFarm Microwave Users Group'
>
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> That is very dependent on whether the business is being run as “milking
> the cash cow” or “reinvesting to grow the business”.  Especially since
> section 179 allows a lot of capital purchases to be expensed in the first
> year.
>
>
>
> I suspect many WISP owners prefer to add staff and equipment and towers
> and customers, rather than declare profits and pay taxes.  That doesn’t
> mean their businesses are worth less to a buyer.  Back when I worked for
> corporate America, I remember around 1990 working for a public high tech
> company and at stockholder meetings the CEO would be asked why the company
> at every earnings statement would just break even or a little more.  He
> would answer they were in business to grow, not to pay taxes.
>
>
>
> I am sometimes puzzled by competitors who seem to have crappy service, are
> hated by their customers, and have high churn.  Then I realize they are
> milking the cash cow, spending as little as possible, and probably making
> as much or more profit as I am.  In the case of big, crappy companies, they
> probably don’t sweat the churn because there are millions more suckers out
> there, you just need advertising to rope some of them in to replace the
> cancellations.  Like when asked about Frontier, I describe them as the slum
> landlord of phone companies.
>
>
>
>
>
> *From:* AF  *On Behalf Of *Chuck McCown
> *Sent:* Saturday, August 22, 2020 10:02 AM
> *To:* AnimalFarm Microwave Users Group 
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> Whatever 5x your earnings are.  Not sales or revenue or gross profit but
> bottom line earnings on your income statement/ pl. Your taxable income.
>
> Sent from my iPhone
>
>
>
> On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:
>
> 
>
> What does the revenue multiplier end up being, though?
>
> 5x EBIDTA / revenue gets you what, in purchases that have been made?
>
>
>
> -
> Mike Hammett
> Intelligent Computing Solutions <http://www.ics-il.com/>
> <https://www.facebook.com/ICSIL>
> <https://plus.google.com/+IntelligentComputingSolutionsDeKalb>
> <https://www.linkedin.com/company/intelligent-computing-solutions>
> <https://twitter.com/ICSIL>
> Midwest Internet Exchange <http://www.midwest-ix.com/>
> <https://www.facebook.com/mdwestix>
> <https://www.linkedin.com/company/midwest-internet-exchange>
> <https://twitter.com/mdwestix>
> The Brothers WISP <http://www.thebrotherswisp.com/>
> <https://www.facebook.com/thebrotherswisp>
>
>
> <https://www.youtube.com/cha

Re: [AFMUG] Buying and selling ISP’s

[Lewis Bergman]

Section 179 lets you expense the entire amount up to whatever the current
cap is. Maybe several million dollars.


On Sat, Aug 22, 2020 at 1:35 PM Matt Hoppes <
mattli...@rivervalleyinternet.net> wrote:

> That doesn’t make any sense. What am I missing?
>
> If I pay $50,000 for a truck and depreciate over 5 years I take $10,000
> per year.
>
> Why would I need to pay back anything if I sell in year 2?
>
> Or are we saying if I write off the entire $50,000 on day one on something
> you’d normally depreciate over 5 years and sell at year 2?
>
> On Aug 22, 2020, at 2:30 PM, ch...@wbmfg.com wrote:
>
> 
> They assume if you ever took depreciation for anything, it was used as an
> offset for income tax you would have paid.  They want that back.  I presume
> stuff you junked does not count.
>
> *From:* Ken Hohhof
> *Sent:* Saturday, August 22, 2020 12:04 PM
> *To:* 'AnimalFarm Microwave Users Group'
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
> Any WISP that has been around for 10+ years has probably expensed or
> depreciated several times as much equipment as is currently active in their
> network.
>
>
>
> Do you have to identify which expensed or depreciated equipment is still
> in use and which went in the dumpster years ago?  And how do they determine
> what the sale price is for the purpose of seeing if it exceeds the
> depreciated cost?  Do they assume the entire sale price of the business was
> to acquire equipment?
>
>
>
> Seems like you would be taxed twice, first for capital gains, then for the
> expenses you used to offset revenue for tax purposes.
>
>
>
> I know most buyers prefer an asset sale to a stock sale, in case there are
> ghosts in the closets.  But would a stock sale avoid this problem?  Does it
> matter C Corp, S Corp or LLC?
>
>
>
>
>
> *From:* AF  *On Behalf Of *ch...@wbmfg.com
> *Sent:* Saturday, August 22, 2020 10:51 AM
> *To:* 'AnimalFarm Microwave Users Group' 
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> One concept that was new to me in my sale was depreciation recapture.  If
> you fully expense or 179 expense or if your equipment is old enough to have
> fully depreciated, all the depreciation expense comes back to bite you in
> the ass.  You will be taxed on it.
>
>
>
> *From:* Ken Hohhof
>
> *Sent:* Saturday, August 22, 2020 9:39 AM
>
> *To:* 'AnimalFarm Microwave Users Group'
>
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> That is very dependent on whether the business is being run as “milking
> the cash cow” or “reinvesting to grow the business”.  Especially since
> section 179 allows a lot of capital purchases to be expensed in the first
> year.
>
>
>
> I suspect many WISP owners prefer to add staff and equipment and towers
> and customers, rather than declare profits and pay taxes.  That doesn’t
> mean their businesses are worth less to a buyer.  Back when I worked for
> corporate America, I remember around 1990 working for a public high tech
> company and at stockholder meetings the CEO would be asked why the company
> at every earnings statement would just break even or a little more.  He
> would answer they were in business to grow, not to pay taxes.
>
>
>
> I am sometimes puzzled by competitors who seem to have crappy service, are
> hated by their customers, and have high churn.  Then I realize they are
> milking the cash cow, spending as little as possible, and probably making
> as much or more profit as I am.  In the case of big, crappy companies, they
> probably don’t sweat the churn because there are millions more suckers out
> there, you just need advertising to rope some of them in to replace the
> cancellations.  Like when asked about Frontier, I describe them as the slum
> landlord of phone companies.
>
>
>
>
>
> *From:* AF  *On Behalf Of *Chuck McCown
> *Sent:* Saturday, August 22, 2020 10:02 AM
> *To:* AnimalFarm Microwave Users Group 
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> Whatever 5x your earnings are.  Not sales or revenue or gross profit but
> bottom line earnings on your income statement/ pl. Your taxable income.
>
> Sent from my iPhone
>
>
>
> On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:
>
> 
>
> What does the revenue multiplier end up being, though?
>
> 5x EBIDTA / revenue gets you what, in purchases that have been made?
>
>
>
> -
> Mike Hammett
> Intelligent Computing Solutions <http://www.ics-il.com/>
> <https://www.facebook.com/ICSIL>
> <https://plus.google.com/+IntelligentComputingSolutionsDeKalb>
> <https://www.linkedin.com/company/i

Re: [AFMUG] Buying and selling ISP’s

[Lewis Bergman]

We expensed all equipment immediately on the CPE side. The only assets we
carried were vehicles and BH.

On Sat, Aug 22, 2020 at 1:04 PM Ken Hohhof  wrote:

> Any WISP that has been around for 10+ years has probably expensed or
> depreciated several times as much equipment as is currently active in their
> network.
>
>
>
> Do you have to identify which expensed or depreciated equipment is still
> in use and which went in the dumpster years ago?  And how do they determine
> what the sale price is for the purpose of seeing if it exceeds the
> depreciated cost?  Do they assume the entire sale price of the business was
> to acquire equipment?
>
>
>
> Seems like you would be taxed twice, first for capital gains, then for the
> expenses you used to offset revenue for tax purposes.
>
>
>
> I know most buyers prefer an asset sale to a stock sale, in case there are
> ghosts in the closets.  But would a stock sale avoid this problem?  Does it
> matter C Corp, S Corp or LLC?
>
>
>
>
>
> *From:* AF  *On Behalf Of *ch...@wbmfg.com
> *Sent:* Saturday, August 22, 2020 10:51 AM
> *To:* 'AnimalFarm Microwave Users Group' 
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> One concept that was new to me in my sale was depreciation recapture.  If
> you fully expense or 179 expense or if your equipment is old enough to have
> fully depreciated, all the depreciation expense comes back to bite you in
> the ass.  You will be taxed on it.
>
>
>
> *From:* Ken Hohhof
>
> *Sent:* Saturday, August 22, 2020 9:39 AM
>
> *To:* 'AnimalFarm Microwave Users Group'
>
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> That is very dependent on whether the business is being run as “milking
> the cash cow” or “reinvesting to grow the business”.  Especially since
> section 179 allows a lot of capital purchases to be expensed in the first
> year.
>
>
>
> I suspect many WISP owners prefer to add staff and equipment and towers
> and customers, rather than declare profits and pay taxes.  That doesn’t
> mean their businesses are worth less to a buyer.  Back when I worked for
> corporate America, I remember around 1990 working for a public high tech
> company and at stockholder meetings the CEO would be asked why the company
> at every earnings statement would just break even or a little more.  He
> would answer they were in business to grow, not to pay taxes.
>
>
>
> I am sometimes puzzled by competitors who seem to have crappy service, are
> hated by their customers, and have high churn.  Then I realize they are
> milking the cash cow, spending as little as possible, and probably making
> as much or more profit as I am.  In the case of big, crappy companies, they
> probably don’t sweat the churn because there are millions more suckers out
> there, you just need advertising to rope some of them in to replace the
> cancellations.  Like when asked about Frontier, I describe them as the slum
> landlord of phone companies.
>
>
>
>
>
> *From:* AF  *On Behalf Of *Chuck McCown
> *Sent:* Saturday, August 22, 2020 10:02 AM
> *To:* AnimalFarm Microwave Users Group 
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> Whatever 5x your earnings are.  Not sales or revenue or gross profit but
> bottom line earnings on your income statement/ pl. Your taxable income.
>
> Sent from my iPhone
>
>
>
> On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:
>
> 
>
> What does the revenue multiplier end up being, though?
>
> 5x EBIDTA / revenue gets you what, in purchases that have been made?
>
>
>
> -
> Mike Hammett
> Intelligent Computing Solutions <http://www.ics-il.com/>
> <https://www.facebook.com/ICSIL>
> <https://plus.google.com/+IntelligentComputingSolutionsDeKalb>
> <https://www.linkedin.com/company/intelligent-computing-solutions>
> <https://twitter.com/ICSIL>
> Midwest Internet Exchange <http://www.midwest-ix.com/>
> <https://www.facebook.com/mdwestix>
> <https://www.linkedin.com/company/midwest-internet-exchange>
> <https://twitter.com/mdwestix>
> The Brothers WISP <http://www.thebrotherswisp.com/>
> <https://www.facebook.com/thebrotherswisp>
>
>
> <https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg>
> --
>
> *From: *"Chuck McCown" 
> *To: *"AnimalFarm Microwave Users Group" 
> *Sent: *Friday, August 21, 2020 8:20:47 PM
> *Subject: *Re: [AFMUG] Buying and selling ISP’s
>
> 5 x ebidta
>
> Revenue multiples are of no value.
>
> Sent from my iPhone
>
>
>
> On Aug 21, 2020, at 5:30 PM, cjwstudi

Re: [AFMUG] Buying and selling ISP’s

[Matt Hoppes]

That doesn’t make any sense. What am I missing?

If I pay $50,000 for a truck and depreciate over 5 years I take $10,000 per 
year. 

Why would I need to pay back anything if I sell in year 2?

Or are we saying if I write off the entire $50,000 on day one on something 
you’d normally depreciate over 5 years and sell at year 2?

> On Aug 22, 2020, at 2:30 PM, ch...@wbmfg.com wrote:
> 
> 
> They assume if you ever took depreciation for anything, it was used as an 
> offset for income tax you would have paid.  They want that back.  I presume 
> stuff you junked does not count. 
>  
> From: Ken Hohhof
> Sent: Saturday, August 22, 2020 12:04 PM
> To: 'AnimalFarm Microwave Users Group'
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> Any WISP that has been around for 10+ years has probably expensed or 
> depreciated several times as much equipment as is currently active in their 
> network.
>  
> Do you have to identify which expensed or depreciated equipment is still in 
> use and which went in the dumpster years ago?  And how do they determine what 
> the sale price is for the purpose of seeing if it exceeds the depreciated 
> cost?  Do they assume the entire sale price of the business was to acquire 
> equipment?
>  
> Seems like you would be taxed twice, first for capital gains, then for the 
> expenses you used to offset revenue for tax purposes.
>  
> I know most buyers prefer an asset sale to a stock sale, in case there are 
> ghosts in the closets.  But would a stock sale avoid this problem?  Does it 
> matter C Corp, S Corp or LLC?
>  
>  
> From: AF  On Behalf Of ch...@wbmfg.com
> Sent: Saturday, August 22, 2020 10:51 AM
> To: 'AnimalFarm Microwave Users Group' 
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> One concept that was new to me in my sale was depreciation recapture.  If you 
> fully expense or 179 expense or if your equipment is old enough to have fully 
> depreciated, all the depreciation expense comes back to bite you in the ass.  
> You will be taxed on it. 
>  
> From: Ken Hohhof
> Sent: Saturday, August 22, 2020 9:39 AM
> To: 'AnimalFarm Microwave Users Group'
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> That is very dependent on whether the business is being run as “milking the 
> cash cow” or “reinvesting to grow the business”.  Especially since section 
> 179 allows a lot of capital purchases to be expensed in the first year.
>  
> I suspect many WISP owners prefer to add staff and equipment and towers and 
> customers, rather than declare profits and pay taxes.  That doesn’t mean 
> their businesses are worth less to a buyer.  Back when I worked for corporate 
> America, I remember around 1990 working for a public high tech company and at 
> stockholder meetings the CEO would be asked why the company at every earnings 
> statement would just break even or a little more.  He would answer they were 
> in business to grow, not to pay taxes.
>  
> I am sometimes puzzled by competitors who seem to have crappy service, are 
> hated by their customers, and have high churn.  Then I realize they are 
> milking the cash cow, spending as little as possible, and probably making as 
> much or more profit as I am.  In the case of big, crappy companies, they 
> probably don’t sweat the churn because there are millions more suckers out 
> there, you just need advertising to rope some of them in to replace the 
> cancellations.  Like when asked about Frontier, I describe them as the slum 
> landlord of phone companies.
>  
>  
> From: AF  On Behalf Of Chuck McCown
> Sent: Saturday, August 22, 2020 10:02 AM
> To: AnimalFarm Microwave Users Group 
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> Whatever 5x your earnings are.  Not sales or revenue or gross profit but 
> bottom line earnings on your income statement/ pl. Your taxable income.
> 
> Sent from my iPhone
>  
> 
> On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:
> 
> 
> What does the revenue multiplier end up being, though?
> 
> 5x EBIDTA / revenue gets you what, in purchases that have been made?
> 
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Friday, August 21, 2020 8:20:47 PM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> 5 x ebidta
> Revenue multiples are of no value.
> 
> Sent from my iPhone
>  
> On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:
> 
> 
> 1x annual revenue and hope the customers stay on
>  
> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes 
>  wrote:
&g

Re: [AFMUG] Buying and selling ISP’s

[chuck]

They assume if you ever took depreciation for anything, it was used as an 
offset for income tax you would have paid.  They want that back.  I presume 
stuff you junked does not count.  

From: Ken Hohhof 
Sent: Saturday, August 22, 2020 12:04 PM
To: 'AnimalFarm Microwave Users Group' 
Subject: Re: [AFMUG] Buying and selling ISP’s

Any WISP that has been around for 10+ years has probably expensed or 
depreciated several times as much equipment as is currently active in their 
network.

 

Do you have to identify which expensed or depreciated equipment is still in use 
and which went in the dumpster years ago?  And how do they determine what the 
sale price is for the purpose of seeing if it exceeds the depreciated cost?  Do 
they assume the entire sale price of the business was to acquire equipment?

 

Seems like you would be taxed twice, first for capital gains, then for the 
expenses you used to offset revenue for tax purposes.

 

I know most buyers prefer an asset sale to a stock sale, in case there are 
ghosts in the closets.  But would a stock sale avoid this problem?  Does it 
matter C Corp, S Corp or LLC?

 

 

From: AF  On Behalf Of ch...@wbmfg.com
Sent: Saturday, August 22, 2020 10:51 AM
To: 'AnimalFarm Microwave Users Group' 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

One concept that was new to me in my sale was depreciation recapture.  If you 
fully expense or 179 expense or if your equipment is old enough to have fully 
depreciated, all the depreciation expense comes back to bite you in the ass.  
You will be taxed on it.  

 

From: Ken Hohhof 

Sent: Saturday, August 22, 2020 9:39 AM

To: 'AnimalFarm Microwave Users Group' 

Subject: Re: [AFMUG] Buying and selling ISP’s

 

That is very dependent on whether the business is being run as “milking the 
cash cow” or “reinvesting to grow the business”.  Especially since section 179 
allows a lot of capital purchases to be expensed in the first year.

 

I suspect many WISP owners prefer to add staff and equipment and towers and 
customers, rather than declare profits and pay taxes.  That doesn’t mean their 
businesses are worth less to a buyer.  Back when I worked for corporate 
America, I remember around 1990 working for a public high tech company and at 
stockholder meetings the CEO would be asked why the company at every earnings 
statement would just break even or a little more.  He would answer they were in 
business to grow, not to pay taxes.

 

I am sometimes puzzled by competitors who seem to have crappy service, are 
hated by their customers, and have high churn.  Then I realize they are milking 
the cash cow, spending as little as possible, and probably making as much or 
more profit as I am.  In the case of big, crappy companies, they probably don’t 
sweat the churn because there are millions more suckers out there, you just 
need advertising to rope some of them in to replace the cancellations.  Like 
when asked about Frontier, I describe them as the slum landlord of phone 
companies.

 

 

From: AF  On Behalf Of Chuck McCown
Sent: Saturday, August 22, 2020 10:02 AM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

Whatever 5x your earnings are.  Not sales or revenue or gross profit but bottom 
line earnings on your income statement/ pl. Your taxable income.

Sent from my iPhone

 

  On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:

  

  What does the revenue multiplier end up being, though?

  5x EBIDTA / revenue gets you what, in purchases that have been made?



  -
  Mike Hammett
  Intelligent Computing Solutions

  Midwest Internet Exchange

  The Brothers WISP






--

  From: "Chuck McCown" 
  To: "AnimalFarm Microwave Users Group" 
  Sent: Friday, August 21, 2020 8:20:47 PM
  Subject: Re: [AFMUG] Buying and selling ISP’s

  5 x ebidta

  Revenue multiples are of no value.

  Sent from my iPhone

   

On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:



1x annual revenue and hope the customers stay on

 

On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes 
 wrote:

  This is the issue I’ve always had when I’ve looked at buying an ISP. It 
always seems like a lot more money I would have to put out to buy then I could 
just build and take the customers if something is wrong with the current 
network.



  > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:

  > 

  > On 8/20/20 8:13 PM, Steve Jones wrote:

  >> I think you either buy or sell, isp isnt really a flip thing

  > 

  > 

  > There is/was someone in my part of the country buying up ISPs and 
trying to package them all together as a flip. My ISP customers tell me it's 
far easier to get the flipper's customers to cancel and switch than buy their 
company.

  > 

  > -- 

  > AF mailin

Re: [AFMUG] Buying and selling ISP’s

[Matt Hoppes]

We expense everything rather than depreciate - with the exception of vehicles. 

> On Aug 22, 2020, at 2:04 PM, Ken Hohhof  wrote:
> 
> 
> Any WISP that has been around for 10+ years has probably expensed or 
> depreciated several times as much equipment as is currently active in their 
> network.
>  
> Do you have to identify which expensed or depreciated equipment is still in 
> use and which went in the dumpster years ago?  And how do they determine what 
> the sale price is for the purpose of seeing if it exceeds the depreciated 
> cost?  Do they assume the entire sale price of the business was to acquire 
> equipment?
>  
> Seems like you would be taxed twice, first for capital gains, then for the 
> expenses you used to offset revenue for tax purposes.
>  
> I know most buyers prefer an asset sale to a stock sale, in case there are 
> ghosts in the closets.  But would a stock sale avoid this problem?  Does it 
> matter C Corp, S Corp or LLC?
>  
>  
> From: AF  On Behalf Of ch...@wbmfg.com
> Sent: Saturday, August 22, 2020 10:51 AM
> To: 'AnimalFarm Microwave Users Group' 
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> One concept that was new to me in my sale was depreciation recapture.  If you 
> fully expense or 179 expense or if your equipment is old enough to have fully 
> depreciated, all the depreciation expense comes back to bite you in the ass.  
> You will be taxed on it. 
>  
> From: Ken Hohhof
> Sent: Saturday, August 22, 2020 9:39 AM
> To: 'AnimalFarm Microwave Users Group'
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> That is very dependent on whether the business is being run as “milking the 
> cash cow” or “reinvesting to grow the business”.  Especially since section 
> 179 allows a lot of capital purchases to be expensed in the first year.
>  
> I suspect many WISP owners prefer to add staff and equipment and towers and 
> customers, rather than declare profits and pay taxes.  That doesn’t mean 
> their businesses are worth less to a buyer.  Back when I worked for corporate 
> America, I remember around 1990 working for a public high tech company and at 
> stockholder meetings the CEO would be asked why the company at every earnings 
> statement would just break even or a little more.  He would answer they were 
> in business to grow, not to pay taxes.
>  
> I am sometimes puzzled by competitors who seem to have crappy service, are 
> hated by their customers, and have high churn.  Then I realize they are 
> milking the cash cow, spending as little as possible, and probably making as 
> much or more profit as I am.  In the case of big, crappy companies, they 
> probably don’t sweat the churn because there are millions more suckers out 
> there, you just need advertising to rope some of them in to replace the 
> cancellations.  Like when asked about Frontier, I describe them as the slum 
> landlord of phone companies.
>  
>  
> From: AF  On Behalf Of Chuck McCown
> Sent: Saturday, August 22, 2020 10:02 AM
> To: AnimalFarm Microwave Users Group 
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> Whatever 5x your earnings are.  Not sales or revenue or gross profit but 
> bottom line earnings on your income statement/ pl. Your taxable income.
> 
> Sent from my iPhone
>  
> 
> On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:
> 
> 
> What does the revenue multiplier end up being, though?
> 
> 5x EBIDTA / revenue gets you what, in purchases that have been made?
> 
> 
> 
> -----
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Friday, August 21, 2020 8:20:47 PM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> 5 x ebidta
> Revenue multiples are of no value.
> 
> Sent from my iPhone
>  
> On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:
> 
> 
> 1x annual revenue and hope the customers stay on
>  
> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes 
>  wrote:
> This is the issue I’ve always had when I’ve looked at buying an ISP. It 
> always seems like a lot more money I would have to put out to buy then I 
> could just build and take the customers if something is wrong with the 
> current network.
> 
> 
> 
> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
> 
> > 
> 
> > On 8/20/20 8:13 PM, Steve Jones wrote:
> 
> >> I think you either buy or sell, isp isnt really a flip thing
> 
> > 
> 
> > 
> 
> > There is/was someone in my part of the country buying up ISPs and trying to 
> > package th

Re: [AFMUG] Buying and selling ISP’s

[Ken Hohhof]

Any WISP that has been around for 10+ years has probably expensed or 
depreciated several times as much equipment as is currently active in their 
network.

 

Do you have to identify which expensed or depreciated equipment is still in use 
and which went in the dumpster years ago?  And how do they determine what the 
sale price is for the purpose of seeing if it exceeds the depreciated cost?  Do 
they assume the entire sale price of the business was to acquire equipment?

 

Seems like you would be taxed twice, first for capital gains, then for the 
expenses you used to offset revenue for tax purposes.

 

I know most buyers prefer an asset sale to a stock sale, in case there are 
ghosts in the closets.  But would a stock sale avoid this problem?  Does it 
matter C Corp, S Corp or LLC?

 

 

From: AF  On Behalf Of ch...@wbmfg.com
Sent: Saturday, August 22, 2020 10:51 AM
To: 'AnimalFarm Microwave Users Group' 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

One concept that was new to me in my sale was depreciation recapture.  If you 
fully expense or 179 expense or if your equipment is old enough to have fully 
depreciated, all the depreciation expense comes back to bite you in the ass.  
You will be taxed on it.  

 

From: Ken Hohhof 

Sent: Saturday, August 22, 2020 9:39 AM

To: 'AnimalFarm Microwave Users Group' 

Subject: Re: [AFMUG] Buying and selling ISP’s

 

That is very dependent on whether the business is being run as “milking the 
cash cow” or “reinvesting to grow the business”.  Especially since section 179 
allows a lot of capital purchases to be expensed in the first year.

 

I suspect many WISP owners prefer to add staff and equipment and towers and 
customers, rather than declare profits and pay taxes.  That doesn’t mean their 
businesses are worth less to a buyer.  Back when I worked for corporate 
America, I remember around 1990 working for a public high tech company and at 
stockholder meetings the CEO would be asked why the company at every earnings 
statement would just break even or a little more.  He would answer they were in 
business to grow, not to pay taxes.

 

I am sometimes puzzled by competitors who seem to have crappy service, are 
hated by their customers, and have high churn.  Then I realize they are milking 
the cash cow, spending as little as possible, and probably making as much or 
more profit as I am.  In the case of big, crappy companies, they probably don’t 
sweat the churn because there are millions more suckers out there, you just 
need advertising to rope some of them in to replace the cancellations.  Like 
when asked about Frontier, I describe them as the slum landlord of phone 
companies.

 

 

From: AF mailto:af-boun...@af.afmug.com> > On Behalf 
Of Chuck McCown
Sent: Saturday, August 22, 2020 10:02 AM
To: AnimalFarm Microwave Users Group mailto:af@af.afmug.com> >
Subject: Re: [AFMUG] Buying and selling ISP’s

 

Whatever 5x your earnings are.  Not sales or revenue or gross profit but bottom 
line earnings on your income statement/ pl. Your taxable income.

Sent from my iPhone

 

On Aug 22, 2020, at 8:16 AM, Mike Hammett mailto:af...@ics-il.net> > wrote:



What does the revenue multiplier end up being, though?

5x EBIDTA / revenue gets you what, in purchases that have been made?



-
Mike Hammett
 <http://www.ics-il.com/> Intelligent Computing Solutions
 <https://www.facebook.com/ICSIL>  
<https://plus.google.com/+IntelligentComputingSolutionsDeKalb>  
<https://www.linkedin.com/company/intelligent-computing-solutions>  
<https://twitter.com/ICSIL> 
 <http://www.midwest-ix.com/> Midwest Internet Exchange
 <https://www.facebook.com/mdwestix>  
<https://www.linkedin.com/company/midwest-internet-exchange>  
<https://twitter.com/mdwestix> 
 <http://www.thebrotherswisp.com/> The Brothers WISP
 <https://www.facebook.com/thebrotherswisp>  
<https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg> 





  _  


From: "Chuck McCown" mailto:ch...@wbmfg.com> >
To: "AnimalFarm Microwave Users Group" mailto:af@af.afmug.com> >
Sent: Friday, August 21, 2020 8:20:47 PM
Subject: Re: [AFMUG] Buying and selling ISP’s

5 x ebidta

Revenue multiples are of no value.

Sent from my iPhone

 

On Aug 21, 2020, at 5:30 PM, cjwstudios mailto:cjwstud...@gmail.com> > wrote:



1x annual revenue and hope the customers stay on

 

On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes mailto:mattli...@rivervalleyinternet.net> > wrote:

This is the issue I’ve always had when I’ve looked at buying an ISP. It always 
seems like a lot more money I would have to put out to buy then I could just 
build and take the customers if something is wrong with the current network.



> On Aug 21, 2020, at 12:43 PM, Seth Mattinen  <mailto:se...@rollernet.us> > wrote:

> 

> On 8/20/20 8:13 PM, Steve Jones wrote:

>> I t

Re: [AFMUG] Buying and selling ISP’s

[Matt Hoppes]

There are two options with a company:

Build it up and sell - which needs to generate enough one time income to 
satisfy removing years of recurring. 

Built it up and smoke it until it’s gone - which basically means you grow it 
huge, invest in it during the prime years, and then smoke it until it’s gone 
living on the scraps for years to come. 

I’m not sure where we will end up.   Right now we’re explosively growing. 

Either someone comes along and offers enough to make selling worthwhile, or we 
keep explosively growing for the next 10-15 years and then we live off the 
proceeds for retirement and let the company wind itself down. 
-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Matt Hoppes]

And that is why I do not have partners. I have close associates. 

> On Aug 22, 2020, at 11:51 AM, ch...@wbmfg.com wrote:
> 
> 
> One concept that was new to me in my sale was depreciation recapture.  If you 
> fully expense or 179 expense or if your equipment is old enough to have fully 
> depreciated, all the depreciation expense comes back to bite you in the ass.  
> You will be taxed on it. 
>  
> From: Ken Hohhof
> Sent: Saturday, August 22, 2020 9:39 AM
> To: 'AnimalFarm Microwave Users Group'
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> That is very dependent on whether the business is being run as “milking the 
> cash cow” or “reinvesting to grow the business”.  Especially since section 
> 179 allows a lot of capital purchases to be expensed in the first year.
>  
> I suspect many WISP owners prefer to add staff and equipment and towers and 
> customers, rather than declare profits and pay taxes.  That doesn’t mean 
> their businesses are worth less to a buyer.  Back when I worked for corporate 
> America, I remember around 1990 working for a public high tech company and at 
> stockholder meetings the CEO would be asked why the company at every earnings 
> statement would just break even or a little more.  He would answer they were 
> in business to grow, not to pay taxes.
>  
> I am sometimes puzzled by competitors who seem to have crappy service, are 
> hated by their customers, and have high churn.  Then I realize they are 
> milking the cash cow, spending as little as possible, and probably making as 
> much or more profit as I am.  In the case of big, crappy companies, they 
> probably don’t sweat the churn because there are millions more suckers out 
> there, you just need advertising to rope some of them in to replace the 
> cancellations.  Like when asked about Frontier, I describe them as the slum 
> landlord of phone companies.
>  
>  
> From: AF  On Behalf Of Chuck McCown
> Sent: Saturday, August 22, 2020 10:02 AM
> To: AnimalFarm Microwave Users Group 
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> Whatever 5x your earnings are.  Not sales or revenue or gross profit but 
> bottom line earnings on your income statement/ pl. Your taxable income.
> 
> Sent from my iPhone
> 
> 
> On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:
> 
> 
> What does the revenue multiplier end up being, though?
> 
> 5x EBIDTA / revenue gets you what, in purchases that have been made?
> 
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Friday, August 21, 2020 8:20:47 PM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> 5 x ebidta
> Revenue multiples are of no value.
> 
> Sent from my iPhone
>  
> On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:
> 
> 
> 1x annual revenue and hope the customers stay on
>  
> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes 
>  wrote:
> This is the issue I’ve always had when I’ve looked at buying an ISP. It 
> always seems like a lot more money I would have to put out to buy then I 
> could just build and take the customers if something is wrong with the 
> current network.
> 
> 
> 
> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
> 
> > 
> 
> > On 8/20/20 8:13 PM, Steve Jones wrote:
> 
> >> I think you either buy or sell, isp isnt really a flip thing
> 
> > 
> 
> > 
> 
> > There is/was someone in my part of the country buying up ISPs and trying to 
> > package them all together as a flip. My ISP customers tell me it's far 
> > easier to get the flipper's customers to cancel and switch than buy their 
> > company.
> 
> > 
> 
> > -- 
> 
> > AF mailing list
> 
> > AF@af.afmug.com
> 
> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> 
> 
> -- 
> 
> AF mailing list
> 
> AF@af.afmug.com
> 
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>  
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Ken Hohhof]

What ever happened to Travis Johnson?  Is he a big real estate tycoon now?

 

For that matter, what ever happened to Doug Clark?

 

It doesn’t seem the same without our optimist and pessimist bookends.  OK, 
that’s an oversimplification, but they were both unique personalities.

 

 

From: AF  On Behalf Of ch...@wbmfg.com
Sent: Saturday, August 22, 2020 10:36 AM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

I sold to JAB.  Got $9.5M for 6000 customers as I recall.  Travis, Sterling and 
I all sold about the same time to them.

 

Once debt was settled enough so that the remaining fiber portion of the company 
could continue as a solvent company, we split it amongst the shareholders.  The 
two primary shareholders got a good chunk.  

 

Then one of the shareholders' wives got greed and years of lawsuits against all 
the other shareholders ensued...

 

So there’s that.  (And huge capital gains bite).  

 

From: Matt Hoppes 

Sent: Saturday, August 22, 2020 9:03 AM

To: AnimalFarm Microwave Users Group 

Subject: Re: [AFMUG] Buying and selling ISP’s

 

If someone offered me enough I might sell. 

 

But it needs to be enough to be worth my while to walk away from:

 

A) a job I enjoy most days

B) walking away from recurring revenue for the next 10 years

C) enough to distribute to my employees who have helped build the company to 
what it is today. 

 

I’m not going to just take money and say “see what suckers!”

 

Most of them work as hard or harder than I do. They’re getting a chunk of any 
sale that happens. 





On Aug 22, 2020, at 10:56 AM, Ken Hohhof mailto:af...@kwisp.com> > wrote:

 

What stopped me from selling several years ago was the tax consequences.  Uncle 
Sam was going to get almost as much as I was.

 

It’s possible that hiring a good tax advisor in advance could improve this 
situation.  Also if you’re thinking about buying or selling, it would probably 
make sense to look at current taxation of capital gains and any associated tax 
dodges, and how that might change in various post-election scenarios.

 

Generally I’ve only been interested in cash deals.  I remember when Keyon 
wanted to buy me out with stock, and claimed that Keyon stock was “better than 
cash” because it would increase in value.  Next thing I heard, they were in 
bankruptcy.  But I have heard of merger-like acquisitions where the seller gets 
stock and even an executive position in the acquiring company.  For some 
people, that might be a better situation, both from the standpoint of a 
continuing income, and how much Uncle Sam grabs.  Not sure if there would be a 
capital gain if you get paid in stock, and what the cost basis would be for 
that stock down the road if you sell it.

 

 

From: AF mailto:af-boun...@af.afmug.com> > On Behalf 
Of Steve Jones
Sent: Saturday, August 22, 2020 9:21 AM
To: AnimalFarm Microwave Users Group mailto:af@af.afmug.com> >
Subject: Re: [AFMUG] Buying and selling ISP’s

 

The boss wants to find some around here for sale, but jab/rise kind of cleaned 
out the shelves. It seems the last few standing either did merger's or are just 
standing on pure spite and irritation like us and wouldnt sell if their teeth 
were getting pulled out.

 

On Sat, Aug 22, 2020, 9:16 AM Mike Hammett mailto:af...@ics-il.net> > wrote:

What does the revenue multiplier end up being, though?

5x EBIDTA / revenue gets you what, in purchases that have been made?



-
Mike Hammett
 <http://www.ics-il.com/> Intelligent Computing Solutions
 <https://www.facebook.com/ICSIL>  
<https://plus.google.com/+IntelligentComputingSolutionsDeKalb>  
<https://www.linkedin.com/company/intelligent-computing-solutions>  
<https://twitter.com/ICSIL> 
 <http://www.midwest-ix.com/> Midwest Internet Exchange
 <https://www.facebook.com/mdwestix>  
<https://www.linkedin.com/company/midwest-internet-exchange>  
<https://twitter.com/mdwestix> 
 <http://www.thebrotherswisp.com/> The Brothers WISP
 <https://www.facebook.com/thebrotherswisp>  
<https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg> 





  _  


From: "Chuck McCown" mailto:ch...@wbmfg.com> >
To: "AnimalFarm Microwave Users Group" mailto:af@af.afmug.com> >
Sent: Friday, August 21, 2020 8:20:47 PM
Subject: Re: [AFMUG] Buying and selling ISP’s

5 x ebidta

Revenue multiples are of no value.

Sent from my iPhone

 

On Aug 21, 2020, at 5:30 PM, cjwstudios mailto:cjwstud...@gmail.com> > wrote:



1x annual revenue and hope the customers stay on

 

On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes mailto:mattli...@rivervalleyinternet.net> > wrote:

This is the issue I’ve always had when I’ve looked at buying an ISP. It always 
seems like a lot more money I would have to put out to buy then I could just 
build and take the customers if something is wrong with the curren

Re: [AFMUG] Buying and selling ISP’s

[chuck]

Frontier might get decertified in Moab Utah.  Another company is requesting to 
be named the provider of last resort there.  If they are successful, you might 
see Frontier disappear everywhere.  

From: Ken Hohhof 
Sent: Saturday, August 22, 2020 9:39 AM
To: 'AnimalFarm Microwave Users Group' 
Subject: Re: [AFMUG] Buying and selling ISP’s

That is very dependent on whether the business is being run as “milking the 
cash cow” or “reinvesting to grow the business”.  Especially since section 179 
allows a lot of capital purchases to be expensed in the first year.

 

I suspect many WISP owners prefer to add staff and equipment and towers and 
customers, rather than declare profits and pay taxes.  That doesn’t mean their 
businesses are worth less to a buyer.  Back when I worked for corporate 
America, I remember around 1990 working for a public high tech company and at 
stockholder meetings the CEO would be asked why the company at every earnings 
statement would just break even or a little more.  He would answer they were in 
business to grow, not to pay taxes.

 

I am sometimes puzzled by competitors who seem to have crappy service, are 
hated by their customers, and have high churn.  Then I realize they are milking 
the cash cow, spending as little as possible, and probably making as much or 
more profit as I am.  In the case of big, crappy companies, they probably don’t 
sweat the churn because there are millions more suckers out there, you just 
need advertising to rope some of them in to replace the cancellations.  Like 
when asked about Frontier, I describe them as the slum landlord of phone 
companies.

 

 

From: AF  On Behalf Of Chuck McCown
Sent: Saturday, August 22, 2020 10:02 AM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

Whatever 5x your earnings are.  Not sales or revenue or gross profit but bottom 
line earnings on your income statement/ pl. Your taxable income.

Sent from my iPhone





  On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:

  

  What does the revenue multiplier end up being, though?

  5x EBIDTA / revenue gets you what, in purchases that have been made?



  -
  Mike Hammett
  Intelligent Computing Solutions

  Midwest Internet Exchange

  The Brothers WISP






--

  From: "Chuck McCown" 
  To: "AnimalFarm Microwave Users Group" 
  Sent: Friday, August 21, 2020 8:20:47 PM
  Subject: Re: [AFMUG] Buying and selling ISP’s

  5 x ebidta

  Revenue multiples are of no value.

  Sent from my iPhone

   

On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:



1x annual revenue and hope the customers stay on

 

On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes 
 wrote:

  This is the issue I’ve always had when I’ve looked at buying an ISP. It 
always seems like a lot more money I would have to put out to buy then I could 
just build and take the customers if something is wrong with the current 
network.



  > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:

  > 

  > On 8/20/20 8:13 PM, Steve Jones wrote:

  >> I think you either buy or sell, isp isnt really a flip thing

  > 

  > 

  > There is/was someone in my part of the country buying up ISPs and 
trying to package them all together as a flip. My ISP customers tell me it's 
far easier to get the flipper's customers to cancel and switch than buy their 
company.

  > 

  > -- 

  > AF mailing list

  > AF@af.afmug.com

  > http://af.afmug.com/mailman/listinfo/af_af.afmug.com



  -- 

  AF mailing list

  AF@af.afmug.com

  http://af.afmug.com/mailman/listinfo/af_af.afmug.com

-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com


  -- 
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  AF@af.afmug.com
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  AF@af.afmug.com
  http://af.afmug.com/mailman/listinfo/af_af.afmug.com




-- 
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AF@af.afmug.com
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AF mailing list
AF@af.afmug.com
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Re: [AFMUG] Buying and selling ISP’s

[chuck]

One concept that was new to me in my sale was depreciation recapture.  If you 
fully expense or 179 expense or if your equipment is old enough to have fully 
depreciated, all the depreciation expense comes back to bite you in the ass.  
You will be taxed on it.  

From: Ken Hohhof 
Sent: Saturday, August 22, 2020 9:39 AM
To: 'AnimalFarm Microwave Users Group' 
Subject: Re: [AFMUG] Buying and selling ISP’s

That is very dependent on whether the business is being run as “milking the 
cash cow” or “reinvesting to grow the business”.  Especially since section 179 
allows a lot of capital purchases to be expensed in the first year.

 

I suspect many WISP owners prefer to add staff and equipment and towers and 
customers, rather than declare profits and pay taxes.  That doesn’t mean their 
businesses are worth less to a buyer.  Back when I worked for corporate 
America, I remember around 1990 working for a public high tech company and at 
stockholder meetings the CEO would be asked why the company at every earnings 
statement would just break even or a little more.  He would answer they were in 
business to grow, not to pay taxes.

 

I am sometimes puzzled by competitors who seem to have crappy service, are 
hated by their customers, and have high churn.  Then I realize they are milking 
the cash cow, spending as little as possible, and probably making as much or 
more profit as I am.  In the case of big, crappy companies, they probably don’t 
sweat the churn because there are millions more suckers out there, you just 
need advertising to rope some of them in to replace the cancellations.  Like 
when asked about Frontier, I describe them as the slum landlord of phone 
companies.

 

 

From: AF  On Behalf Of Chuck McCown
Sent: Saturday, August 22, 2020 10:02 AM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

Whatever 5x your earnings are.  Not sales or revenue or gross profit but bottom 
line earnings on your income statement/ pl. Your taxable income.

Sent from my iPhone





  On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:

  

  What does the revenue multiplier end up being, though?

  5x EBIDTA / revenue gets you what, in purchases that have been made?



  -
  Mike Hammett
  Intelligent Computing Solutions

  Midwest Internet Exchange

  The Brothers WISP






--

  From: "Chuck McCown" 
  To: "AnimalFarm Microwave Users Group" 
  Sent: Friday, August 21, 2020 8:20:47 PM
  Subject: Re: [AFMUG] Buying and selling ISP’s

  5 x ebidta

  Revenue multiples are of no value.

  Sent from my iPhone

   

On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:



1x annual revenue and hope the customers stay on

 

On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes 
 wrote:

  This is the issue I’ve always had when I’ve looked at buying an ISP. It 
always seems like a lot more money I would have to put out to buy then I could 
just build and take the customers if something is wrong with the current 
network.



  > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:

  > 

  > On 8/20/20 8:13 PM, Steve Jones wrote:

  >> I think you either buy or sell, isp isnt really a flip thing

  > 

  > 

  > There is/was someone in my part of the country buying up ISPs and 
trying to package them all together as a flip. My ISP customers tell me it's 
far easier to get the flipper's customers to cancel and switch than buy their 
company.

  > 

  > -- 

  > AF mailing list

  > AF@af.afmug.com

  > http://af.afmug.com/mailman/listinfo/af_af.afmug.com



  -- 

  AF mailing list

  AF@af.afmug.com

  http://af.afmug.com/mailman/listinfo/af_af.afmug.com

-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com


  -- 
  AF mailing list
  AF@af.afmug.com
  http://af.afmug.com/mailman/listinfo/af_af.afmug.com

   

  -- 
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  AF@af.afmug.com
  http://af.afmug.com/mailman/listinfo/af_af.afmug.com




-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com
-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Ken Hohhof]

That is very dependent on whether the business is being run as “milking the 
cash cow” or “reinvesting to grow the business”.  Especially since section 179 
allows a lot of capital purchases to be expensed in the first year.

 

I suspect many WISP owners prefer to add staff and equipment and towers and 
customers, rather than declare profits and pay taxes.  That doesn’t mean their 
businesses are worth less to a buyer.  Back when I worked for corporate 
America, I remember around 1990 working for a public high tech company and at 
stockholder meetings the CEO would be asked why the company at every earnings 
statement would just break even or a little more.  He would answer they were in 
business to grow, not to pay taxes.

 

I am sometimes puzzled by competitors who seem to have crappy service, are 
hated by their customers, and have high churn.  Then I realize they are milking 
the cash cow, spending as little as possible, and probably making as much or 
more profit as I am.  In the case of big, crappy companies, they probably don’t 
sweat the churn because there are millions more suckers out there, you just 
need advertising to rope some of them in to replace the cancellations.  Like 
when asked about Frontier, I describe them as the slum landlord of phone 
companies.

 

 

From: AF  On Behalf Of Chuck McCown
Sent: Saturday, August 22, 2020 10:02 AM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

Whatever 5x your earnings are.  Not sales or revenue or gross profit but bottom 
line earnings on your income statement/ pl. Your taxable income.

Sent from my iPhone





On Aug 22, 2020, at 8:16 AM, Mike Hammett mailto:af...@ics-il.net> > wrote:



What does the revenue multiplier end up being, though?

5x EBIDTA / revenue gets you what, in purchases that have been made?



-
Mike Hammett
 <http://www.ics-il.com/> Intelligent Computing Solutions
 <https://www.facebook.com/ICSIL>  
<https://plus.google.com/+IntelligentComputingSolutionsDeKalb>  
<https://www.linkedin.com/company/intelligent-computing-solutions>  
<https://twitter.com/ICSIL> 
 <http://www.midwest-ix.com/> Midwest Internet Exchange
 <https://www.facebook.com/mdwestix>  
<https://www.linkedin.com/company/midwest-internet-exchange>  
<https://twitter.com/mdwestix> 
 <http://www.thebrotherswisp.com/> The Brothers WISP
 <https://www.facebook.com/thebrotherswisp>  
<https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg> 





  _  


From: "Chuck McCown" mailto:ch...@wbmfg.com> >
To: "AnimalFarm Microwave Users Group" mailto:af@af.afmug.com> >
Sent: Friday, August 21, 2020 8:20:47 PM
Subject: Re: [AFMUG] Buying and selling ISP’s

5 x ebidta

Revenue multiples are of no value.

Sent from my iPhone

 

On Aug 21, 2020, at 5:30 PM, cjwstudios mailto:cjwstud...@gmail.com> > wrote:



1x annual revenue and hope the customers stay on

 

On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes mailto:mattli...@rivervalleyinternet.net> > wrote:

This is the issue I’ve always had when I’ve looked at buying an ISP. It always 
seems like a lot more money I would have to put out to buy then I could just 
build and take the customers if something is wrong with the current network.



> On Aug 21, 2020, at 12:43 PM, Seth Mattinen  <mailto:se...@rollernet.us> > wrote:

> 

> On 8/20/20 8:13 PM, Steve Jones wrote:

>> I think you either buy or sell, isp isnt really a flip thing

> 

> 

> There is/was someone in my part of the country buying up ISPs and trying to 
> package them all together as a flip. My ISP customers tell me it's far easier 
> to get the flipper's customers to cancel and switch than buy their company.

> 

> -- 

> AF mailing list

> AF@af.afmug.com <mailto:AF@af.afmug.com> 

> http://af.afmug.com/mailman/listinfo/af_af.afmug.com



-- 

AF mailing list

AF@af.afmug.com <mailto:AF@af.afmug.com> 

http://af.afmug.com/mailman/listinfo/af_af.afmug.com

-- 
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AF@af.afmug.com <mailto:AF@af.afmug.com> 
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AF@af.afmug.com <mailto:AF@af.afmug.com> 
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

 

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AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[chuck]

I sold to JAB.  Got $9.5M for 6000 customers as I recall.  Travis, Sterling and 
I all sold about the same time to them.

Once debt was settled enough so that the remaining fiber portion of the company 
could continue as a solvent company, we split it amongst the shareholders.  The 
two primary shareholders got a good chunk.  

Then one of the shareholders' wives got greed and years of lawsuits against all 
the other shareholders ensued...

So there’s that.  (And huge capital gains bite).  

From: Matt Hoppes 
Sent: Saturday, August 22, 2020 9:03 AM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

If someone offered me enough I might sell. 

But it needs to be enough to be worth my while to walk away from:

A) a job I enjoy most days
B) walking away from recurring revenue for the next 10 years
C) enough to distribute to my employees who have helped build the company to 
what it is today. 

I’m not going to just take money and say “see what suckers!”

Most of them work as hard or harder than I do. They’re getting a chunk of any 
sale that happens. 


  On Aug 22, 2020, at 10:56 AM, Ken Hohhof  wrote:


   
  What stopped me from selling several years ago was the tax consequences.  
Uncle Sam was going to get almost as much as I was.

   

  It’s possible that hiring a good tax advisor in advance could improve this 
situation.  Also if you’re thinking about buying or selling, it would probably 
make sense to look at current taxation of capital gains and any associated tax 
dodges, and how that might change in various post-election scenarios.

   

  Generally I’ve only been interested in cash deals.  I remember when Keyon 
wanted to buy me out with stock, and claimed that Keyon stock was “better than 
cash” because it would increase in value.  Next thing I heard, they were in 
bankruptcy.  But I have heard of merger-like acquisitions where the seller gets 
stock and even an executive position in the acquiring company.  For some 
people, that might be a better situation, both from the standpoint of a 
continuing income, and how much Uncle Sam grabs.  Not sure if there would be a 
capital gain if you get paid in stock, and what the cost basis would be for 
that stock down the road if you sell it.

   

   

  From: AF  On Behalf Of Steve Jones
  Sent: Saturday, August 22, 2020 9:21 AM
  To: AnimalFarm Microwave Users Group 
  Subject: Re: [AFMUG] Buying and selling ISP’s

   

  The boss wants to find some around here for sale, but jab/rise kind of 
cleaned out the shelves. It seems the last few standing either did merger's or 
are just standing on pure spite and irritation like us and wouldnt sell if 
their teeth were getting pulled out.

   

  On Sat, Aug 22, 2020, 9:16 AM Mike Hammett  wrote:

What does the revenue multiplier end up being, though?

5x EBIDTA / revenue gets you what, in purchases that have been made?



-
Mike Hammett
Intelligent Computing Solutions

Midwest Internet Exchange

The Brothers WISP








From: "Chuck McCown" 
To: "AnimalFarm Microwave Users Group" 
Sent: Friday, August 21, 2020 8:20:47 PM
    Subject: Re: [AFMUG] Buying and selling ISP’s

5 x ebidta

Revenue multiples are of no value.

Sent from my iPhone

 

  On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:

  

  1x annual revenue and hope the customers stay on

   

  On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes 
 wrote:

This is the issue I’ve always had when I’ve looked at buying an ISP. It 
always seems like a lot more money I would have to put out to buy then I could 
just build and take the customers if something is wrong with the current 
network.



> On Aug 21, 2020, at 12:43 PM, Seth Mattinen  
wrote:

> 

> On 8/20/20 8:13 PM, Steve Jones wrote:

>> I think you either buy or sell, isp isnt really a flip thing

> 

> 

> There is/was someone in my part of the country buying up ISPs and 
trying to package them all together as a flip. My ISP customers tell me it's 
far easier to get the flipper's customers to cancel and switch than buy their 
company.

> 

> -- 

> AF mailing list

> AF@af.afmug.com

> http://af.afmug.com/mailman/listinfo/af_af.afmug.com



-- 

AF mailing list

AF@af.afmug.com

http://af.afmug.com/mailman/listinfo/af_af.afmug.com

  -- 
  AF mailing list
  AF@af.afmug.com
  http://af.afmug.com/mailman/listinfo/af_af.afmug.com


-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

 

-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

  -- 
  AF mailin

Re: [AFMUG] Buying and selling ISP’s

[Matt Hoppes]

If someone offered me enough I might sell. 

But it needs to be enough to be worth my while to walk away from:

A) a job I enjoy most days
B) walking away from recurring revenue for the next 10 years
C) enough to distribute to my employees who have helped build the company to 
what it is today. 

I’m not going to just take money and say “see what suckers!”

Most of them work as hard or harder than I do. They’re getting a chunk of any 
sale that happens. 

> On Aug 22, 2020, at 10:56 AM, Ken Hohhof  wrote:
> 
> 
> What stopped me from selling several years ago was the tax consequences.  
> Uncle Sam was going to get almost as much as I was.
>  
> It’s possible that hiring a good tax advisor in advance could improve this 
> situation.  Also if you’re thinking about buying or selling, it would 
> probably make sense to look at current taxation of capital gains and any 
> associated tax dodges, and how that might change in various post-election 
> scenarios.
>  
> Generally I’ve only been interested in cash deals.  I remember when Keyon 
> wanted to buy me out with stock, and claimed that Keyon stock was “better 
> than cash” because it would increase in value.  Next thing I heard, they were 
> in bankruptcy.  But I have heard of merger-like acquisitions where the seller 
> gets stock and even an executive position in the acquiring company.  For some 
> people, that might be a better situation, both from the standpoint of a 
> continuing income, and how much Uncle Sam grabs.  Not sure if there would be 
> a capital gain if you get paid in stock, and what the cost basis would be for 
> that stock down the road if you sell it.
>  
>  
> From: AF  On Behalf Of Steve Jones
> Sent: Saturday, August 22, 2020 9:21 AM
> To: AnimalFarm Microwave Users Group 
> Subject: Re: [AFMUG] Buying and selling ISP’s
>  
> The boss wants to find some around here for sale, but jab/rise kind of 
> cleaned out the shelves. It seems the last few standing either did merger's 
> or are just standing on pure spite and irritation like us and wouldnt sell if 
> their teeth were getting pulled out.
>  
> On Sat, Aug 22, 2020, 9:16 AM Mike Hammett  wrote:
> What does the revenue multiplier end up being, though?
> 
> 5x EBIDTA / revenue gets you what, in purchases that have been made?
> 
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Friday, August 21, 2020 8:20:47 PM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> 5 x ebidta
> Revenue multiples are of no value.
> 
> Sent from my iPhone
>  
> On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:
> 
> 
> 1x annual revenue and hope the customers stay on
>  
> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes 
>  wrote:
> This is the issue I’ve always had when I’ve looked at buying an ISP. It 
> always seems like a lot more money I would have to put out to buy then I 
> could just build and take the customers if something is wrong with the 
> current network.
> 
> 
> 
> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
> 
> > 
> 
> > On 8/20/20 8:13 PM, Steve Jones wrote:
> 
> >> I think you either buy or sell, isp isnt really a flip thing
> 
> > 
> 
> > 
> 
> > There is/was someone in my part of the country buying up ISPs and trying to 
> > package them all together as a flip. My ISP customers tell me it's far 
> > easier to get the flipper's customers to cancel and switch than buy their 
> > company.
> 
> > 
> 
> > -- 
> 
> > AF mailing list
> 
> > AF@af.afmug.com
> 
> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> 
> 
> -- 
> 
> AF mailing list
> 
> AF@af.afmug.com
> 
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>  
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Chuck McCown]

Whatever 5x your earnings are.  Not sales or revenue or gross profit but bottom 
line earnings on your income statement/ pl. Your taxable income.

Sent from my iPhone

> On Aug 22, 2020, at 8:16 AM, Mike Hammett  wrote:
> 
> 
> What does the revenue multiplier end up being, though?
> 
> 5x EBIDTA / revenue gets you what, in purchases that have been made?
> 
> 
> 
> -
> Mike Hammett
> Intelligent Computing Solutions
> 
> Midwest Internet Exchange
> 
> The Brothers WISP
> 
> 
> 
> 
> From: "Chuck McCown" 
> To: "AnimalFarm Microwave Users Group" 
> Sent: Friday, August 21, 2020 8:20:47 PM
> Subject: Re: [AFMUG] Buying and selling ISP’s
> 
> 5 x ebidta
> Revenue multiples are of no value.
> 
> Sent from my iPhone
> 
> On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:
> 
> 
> 1x annual revenue and hope the customers stay on
> 
>> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes 
>>  wrote:
>> This is the issue I’ve always had when I’ve looked at buying an ISP. It 
>> always seems like a lot more money I would have to put out to buy then I 
>> could just build and take the customers if something is wrong with the 
>> current network.
>> 
>> 
>> 
>> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
>> 
>> > 
>> 
>> > On 8/20/20 8:13 PM, Steve Jones wrote:
>> 
>> >> I think you either buy or sell, isp isnt really a flip thing
>> 
>> > 
>> 
>> > 
>> 
>> > There is/was someone in my part of the country buying up ISPs and trying 
>> > to package them all together as a flip. My ISP customers tell me it's far 
>> > easier to get the flipper's customers to cancel and switch than buy their 
>> > company.
>> 
>> > 
>> 
>> > -- 
>> 
>> > AF mailing list
>> 
>> > AF@af.afmug.com
>> 
>> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>> 
>> 
>> 
>> -- 
>> 
>> AF mailing list
>> 
>> AF@af.afmug.com
>> 
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
> 
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
-- 
AF mailing list
AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Ken Hohhof]

What stopped me from selling several years ago was the tax consequences.  Uncle 
Sam was going to get almost as much as I was.

 

It’s possible that hiring a good tax advisor in advance could improve this 
situation.  Also if you’re thinking about buying or selling, it would probably 
make sense to look at current taxation of capital gains and any associated tax 
dodges, and how that might change in various post-election scenarios.

 

Generally I’ve only been interested in cash deals.  I remember when Keyon 
wanted to buy me out with stock, and claimed that Keyon stock was “better than 
cash” because it would increase in value.  Next thing I heard, they were in 
bankruptcy.  But I have heard of merger-like acquisitions where the seller gets 
stock and even an executive position in the acquiring company.  For some 
people, that might be a better situation, both from the standpoint of a 
continuing income, and how much Uncle Sam grabs.  Not sure if there would be a 
capital gain if you get paid in stock, and what the cost basis would be for 
that stock down the road if you sell it.

 

 

From: AF  On Behalf Of Steve Jones
Sent: Saturday, August 22, 2020 9:21 AM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

The boss wants to find some around here for sale, but jab/rise kind of cleaned 
out the shelves. It seems the last few standing either did merger's or are just 
standing on pure spite and irritation like us and wouldnt sell if their teeth 
were getting pulled out.

 

On Sat, Aug 22, 2020, 9:16 AM Mike Hammett mailto:af...@ics-il.net> > wrote:

What does the revenue multiplier end up being, though?

5x EBIDTA / revenue gets you what, in purchases that have been made?



-
Mike Hammett
 <http://www.ics-il.com/> Intelligent Computing Solutions
 <https://www.facebook.com/ICSIL>  
<https://plus.google.com/+IntelligentComputingSolutionsDeKalb>  
<https://www.linkedin.com/company/intelligent-computing-solutions>  
<https://twitter.com/ICSIL> 
 <http://www.midwest-ix.com/> Midwest Internet Exchange
 <https://www.facebook.com/mdwestix>  
<https://www.linkedin.com/company/midwest-internet-exchange>  
<https://twitter.com/mdwestix> 
 <http://www.thebrotherswisp.com/> The Brothers WISP
 <https://www.facebook.com/thebrotherswisp>  
<https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg> 





  _  


From: "Chuck McCown" mailto:ch...@wbmfg.com> >
To: "AnimalFarm Microwave Users Group" mailto:af@af.afmug.com> >
Sent: Friday, August 21, 2020 8:20:47 PM
Subject: Re: [AFMUG] Buying and selling ISP’s

5 x ebidta

Revenue multiples are of no value.

Sent from my iPhone

 

On Aug 21, 2020, at 5:30 PM, cjwstudios mailto:cjwstud...@gmail.com> > wrote:



1x annual revenue and hope the customers stay on

 

On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes mailto:mattli...@rivervalleyinternet.net> > wrote:

This is the issue I’ve always had when I’ve looked at buying an ISP. It always 
seems like a lot more money I would have to put out to buy then I could just 
build and take the customers if something is wrong with the current network.



> On Aug 21, 2020, at 12:43 PM, Seth Mattinen  <mailto:se...@rollernet.us> > wrote:

> 

> On 8/20/20 8:13 PM, Steve Jones wrote:

>> I think you either buy or sell, isp isnt really a flip thing

> 

> 

> There is/was someone in my part of the country buying up ISPs and trying to 
> package them all together as a flip. My ISP customers tell me it's far easier 
> to get the flipper's customers to cancel and switch than buy their company.

> 

> -- 

> AF mailing list

> AF@af.afmug.com <mailto:AF@af.afmug.com> 

> http://af.afmug.com/mailman/listinfo/af_af.afmug.com



-- 

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AF@af.afmug.com <mailto:AF@af.afmug.com> 

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Re: [AFMUG] Buying and selling ISP’s

[Seth Mattinen]

On 8/21/20 7:13 PM, Ken Hohhof wrote:
In reality, many dialup ISPs used wholesale modem banks and their only 
expense was advertising, and their only asset was customers.


I still see that today. "We're nationwide!!" Congrats on being able to 
resell AT&T I guess.


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Re: [AFMUG] Buying and selling ISP’s

[Steve Jones]

The boss wants to find some around here for sale, but jab/rise kind of
cleaned out the shelves. It seems the last few standing either did merger's
or are just standing on pure spite and irritation like us and wouldnt sell
if their teeth were getting pulled out.

On Sat, Aug 22, 2020, 9:16 AM Mike Hammett  wrote:

> What does the revenue multiplier end up being, though?
>
> 5x EBIDTA / revenue gets you what, in purchases that have been made?
>
>
>
> -
> Mike Hammett
> Intelligent Computing Solutions <http://www.ics-il.com/>
> <https://www.facebook.com/ICSIL>
> <https://plus.google.com/+IntelligentComputingSolutionsDeKalb>
> <https://www.linkedin.com/company/intelligent-computing-solutions>
> <https://twitter.com/ICSIL>
> Midwest Internet Exchange <http://www.midwest-ix.com/>
> <https://www.facebook.com/mdwestix>
> <https://www.linkedin.com/company/midwest-internet-exchange>
> <https://twitter.com/mdwestix>
> The Brothers WISP <http://www.thebrotherswisp.com/>
> <https://www.facebook.com/thebrotherswisp>
>
>
> <https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg>
> ------
> *From: *"Chuck McCown" 
> *To: *"AnimalFarm Microwave Users Group" 
> *Sent: *Friday, August 21, 2020 8:20:47 PM
> *Subject: *Re: [AFMUG] Buying and selling ISP’s
>
> 5 x ebidta
> Revenue multiples are of no value.
>
> Sent from my iPhone
>
> On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:
>
> 
> 1x annual revenue and hope the customers stay on
>
> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes <
> mattli...@rivervalleyinternet.net> wrote:
>
>> This is the issue I’ve always had when I’ve looked at buying an ISP. It
>> always seems like a lot more money I would have to put out to buy then I
>> could just build and take the customers if something is wrong with the
>> current network.
>>
>>
>>
>> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
>>
>> >
>>
>> > On 8/20/20 8:13 PM, Steve Jones wrote:
>>
>> >> I think you either buy or sell, isp isnt really a flip thing
>>
>> >
>>
>> >
>>
>> > There is/was someone in my part of the country buying up ISPs and
>> trying to package them all together as a flip. My ISP customers tell me
>> it's far easier to get the flipper's customers to cancel and switch than
>> buy their company.
>>
>> >
>>
>> > --
>>
>> > AF mailing list
>>
>> > AF@af.afmug.com
>>
>> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
>>
>>
>> --
>>
>> AF mailing list
>>
>> AF@af.afmug.com
>>
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
>> --
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>
>
> --
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>
> --
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>
-- 
AF mailing list
AF@af.afmug.com
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Re: [AFMUG] Buying and selling ISP’s

[Mike Hammett]

What does the revenue multiplier end up being, though? 

5x EBIDTA / revenue gets you what, in purchases that have been made? 




- 
Mike Hammett 
Intelligent Computing Solutions 

Midwest Internet Exchange 

The Brothers WISP 




- Original Message -

From: "Chuck McCown"  
To: "AnimalFarm Microwave Users Group"  
Sent: Friday, August 21, 2020 8:20:47 PM 
Subject: Re: [AFMUG] Buying and selling ISP’s 

5 x ebidta 
Revenue multiples are of no value. 


Sent from my iPhone 



On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote: 








1x annual revenue and hope the customers stay on 



On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes < mattli...@rivervalleyinternet.net 
> wrote: 


This is the issue I’ve always had when I’ve looked at buying an ISP. It always 
seems like a lot more money I would have to put out to buy then I could just 
build and take the customers if something is wrong with the current network. 



> On Aug 21, 2020, at 12:43 PM, Seth Mattinen < se...@rollernet.us > wrote: 

> 

> On 8/20/20 8:13 PM, Steve Jones wrote: 

>> I think you either buy or sell, isp isnt really a flip thing 

> 

> 

> There is/was someone in my part of the country buying up ISPs and trying to 
> package them all together as a flip. My ISP customers tell me it's far easier 
> to get the flipper's customers to cancel and switch than buy their company. 

> 

> -- 

> AF mailing list 

> AF@af.afmug.com 

> http://af.afmug.com/mailman/listinfo/af_af.afmug.com 



-- 

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AF@af.afmug.com 

http://af.afmug.com/mailman/listinfo/af_af.afmug.com 



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http://af.afmug.com/mailman/listinfo/af_af.afmug.com 



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http://af.afmug.com/mailman/listinfo/af_af.afmug.com 

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Re: [AFMUG] Buying and selling ISP’s

[Tyson Burris]

Yes they do! In the past 16 years in business, these have been tentative offers 
from various companies to buy mine:
(obviously as we grew)

250K declined
400K  declined
500K  declined

 *   M declined
1.4  M declined
1.8  M considered briefly but finally declined

The last two have been over the past 12 months alone.
I cannot speak for others, but the growth is non stop despite all the 
competition.
At some point though you just have say that’s a lot of money and accept.

Tyson Burris, President
Internet Communications Inc.
739 Commerce Dr.
Franklin, IN 46131

Office # 317-738-0320
Cell/Direct # 317-412-1540
Online: www.surfici.net

[ICI]
What can ICI do for you?

Broadband Wireless - PtP/PtMP Solutions - Mesh Wifi/Hotzones - IP Cameras - 
Fiber - Towers - Infrastructure.

CONFIDENTIALITY NOTICE: This e-mail is intended for the
addressee shown. It contains information that is
confidential and protected from disclosure. Any review,
dissemination or use of this transmission or its contents by
unauthorized organizations or individuals is strictly
prohibited.

From: AF  On Behalf Of cjwstudios
Sent: Thursday, August 20, 2020 9:46 PM
To: af@af.afmug.com
Subject: [AFMUG] Buying and selling ISP’s

Do folks still buy and sell ISP’s?  I was bored and thinking about getting back 
into climbing ladders.  I need the exercise.

Best,
CJ
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Re: [AFMUG] Buying and selling ISP’s

[Ken Hohhof]

BTW, if you do buy a WISP, make sure the tower leases and colocation agreements 
are actual paper agreements, not informal agreements, and see if they are 
transferable.

 

And watch out for prepaid customer accounts.  Like paid quarterly or annual.  
You will have to provide service for on average 6 months with no revenue to  
annual prepay customers.  If there are a significant percentage of annual 
prepays, you should expect the seller to get a lower price to account for this. 
 Also realize that a certain percentage of those annual customers may already 
be ex customers, you just don’t know it yet.  They may have not asked for a 
prorated refund, or the seller may not have offered that.

 

From: AF  On Behalf Of Ken Hohhof
Sent: Friday, August 21, 2020 9:13 PM
To: 'AnimalFarm Microwave Users Group' 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

It seems like JAB popularized the model of x times gross revenue or $x per 
subscriber.  I think their mindset was literally they were buying customers, 
and when they got to some magic customer count, they could find a buyer, flip 
the whole thing and cash out.

 

Also I think the JAB guys came out of the cable TV acquisitions of the 1980’s 
and 1990’s where a few investors gobbled up tons of local cable systems.  The 
magic number seemed to be $2000 per sub.  Initially around $1000 but as high as 
$5000 at the peak of the consolidation frenzy.  Which back then was probably a 
lot more than 1x or 2x revenue.

 

Back in the dialup days (and every dialup ISP owner intended to sell at some 
point), valuations were very much x many months revenue or x per sub.  But I 
guess costs and infrastructure were no big deal with dialup.  Yes you might buy 
an ISP that used Livingston equipment and you preferred Ascend.  In reality, 
many dialup ISPs used wholesale modem banks and their only expense was 
advertising, and their only asset was customers.

 

 

From: AF mailto:af-boun...@af.afmug.com> > On Behalf 
Of ch...@wbmfg.com <mailto:ch...@wbmfg.com> 
Sent: Friday, August 21, 2020 8:42 PM
To: AnimalFarm Microwave Users Group mailto:af@af.afmug.com> >
Subject: Re: [AFMUG] Buying and selling ISP’s

 

Say your revenue is $1M per year, but your net income is –$250K.  What is that 
worth?  

Negative amounts.  You would probably have to pay someone to buy it.  

 

Another company has revenue of $1M.  Net income of +250K year after year.  What 
is it worth.  

At least $1M.

 

These are income base approaches.  There are net asset based/cost approaches.  
They attempt to value the fair market value of the assets.  

 

And there are market approaches.  What is your book worth.  

 

You really have to look at all three.  Back in the day when I was doing lots of 
acquisitions I would give you $250-$500 per customer (market approach) and 
$1000 per customer if it was a good Canopy network (combination of Market and 
Asset approach).  But that is because we had some pretty expert knowledge on 
what those were worth.  The ebidta approach (net income) was somewhat worthless 
because many of these guys either milked the companies dry or were simply bad 
at business.  

 

But if they do have a nice EBIDTA year after year, you can make an offer based 
on that alone believing you can operate as well or better than they did.  But 
you really need to look at all three methods and analyze the potential changes 
in the competition picture etc.  

 

But there is NO valuation method that only looks at revenue.  People with 
crappy companies will try to tell unsophisticated potential buyers that a 1X or 
2X revenue is “the standard way” to value a business.  BS.

 

From: Forrest Christian (List Account) 

Sent: Friday, August 21, 2020 7:21 PM

To: AnimalFarm Microwave Users Group 

Subject: Re: [AFMUG] Buying and selling ISP’s

 

The last one we looked at purchasing, the owner wanted "much more than 1x 
revenue".   We knew from experience with the gear they were using, and the way 
that they had it all put together that it was going to require replacing every 
bit of gear in the network and in some cases fixing towers themselves.   We 
walked away from that one.   Would have been happy to have their customer base, 
but it wasn't worth what the owner was demanding. 

 

On the other hand, if one walked into a network that was using similar gear, 
was designed well, and so on, paying a premium would have been worth it.   

 

On Fri, Aug 21, 2020 at 6:26 PM Ryan Ray mailto:ryan...@gmail.com> > wrote:

I don't know about your business, but mine is run so nicely that if someone 
bought it, you wouldn't have to do shit all other than billing and normal 
troubleshooting. That's why anyone who does a generalized "ISP is worth x* 
dollars" doesn't make any sense. It's so dependant on the business and the 
area. 

 

On Fri, Aug 21, 2020 at 5:02 PM Ken Hohhof mailto:af...@kwisp.com> > wrote:

Re: [AFMUG] Buying and selling ISP’s

[Lewis Bergman]

That is hilarious

On Fri, Aug 21, 2020 at 7:26 PM Ryan Ray  wrote:

> I don't know about your business, but mine is run so nicely that if
> someone bought it, you wouldn't have to do shit all other than billing and
> normal troubleshooting. That's why anyone who does a generalized "ISP is
> worth x* dollars" doesn't make any sense. It's so dependant on the business
> and the area.
>
> On Fri, Aug 21, 2020 at 5:02 PM Ken Hohhof  wrote:
>
>> I heard an “expert” once on a radio show advising small business owners
>> how to prep their business for sale.  The advice was to cut costs to
>> inflate EBITDA because that’s what the sale price would be based on.  So if
>> the seller followed that advice, network upgrades and maintenance would
>> have been neglected.  On the other hand, if you planned to cut redundant
>> staff, some of that might have already been done.
>>
>>
>>
>>
>>
>> *From:* AF  *On Behalf Of *cjwstudios
>> *Sent:* Friday, August 21, 2020 6:30 PM
>> *To:* AnimalFarm Microwave Users Group 
>> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>>
>>
>>
>> 1x annual revenue and hope the customers stay on
>>
>>
>>
>> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes <
>> mattli...@rivervalleyinternet.net> wrote:
>>
>> This is the issue I’ve always had when I’ve looked at buying an ISP. It
>> always seems like a lot more money I would have to put out to buy then I
>> could just build and take the customers if something is wrong with the
>> current network.
>>
>>
>>
>> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
>>
>> >
>>
>> > On 8/20/20 8:13 PM, Steve Jones wrote:
>>
>> >> I think you either buy or sell, isp isnt really a flip thing
>>
>> >
>>
>> >
>>
>> > There is/was someone in my part of the country buying up ISPs and
>> trying to package them all together as a flip. My ISP customers tell me
>> it's far easier to get the flipper's customers to cancel and switch than
>> buy their company.
>>
>> >
>>
>> > --
>>
>> > AF mailing list
>>
>> > AF@af.afmug.com
>>
>> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
>>
>>
>> --
>>
>> AF mailing list
>>
>> AF@af.afmug.com
>>
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
>> --
>> AF mailing list
>> AF@af.afmug.com
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
> --
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>


-- 
Lewis Bergman
325-439-0533 Cell
-- 
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AF@af.afmug.com
http://af.afmug.com/mailman/listinfo/af_af.afmug.com

Re: [AFMUG] Buying and selling ISP’s

[Ken Hohhof]

It seems like JAB popularized the model of x times gross revenue or $x per 
subscriber.  I think their mindset was literally they were buying customers, 
and when they got to some magic customer count, they could find a buyer, flip 
the whole thing and cash out.

 

Also I think the JAB guys came out of the cable TV acquisitions of the 1980’s 
and 1990’s where a few investors gobbled up tons of local cable systems.  The 
magic number seemed to be $2000 per sub.  Initially around $1000 but as high as 
$5000 at the peak of the consolidation frenzy.  Which back then was probably a 
lot more than 1x or 2x revenue.

 

Back in the dialup days (and every dialup ISP owner intended to sell at some 
point), valuations were very much x many months revenue or x per sub.  But I 
guess costs and infrastructure were no big deal with dialup.  Yes you might buy 
an ISP that used Livingston equipment and you preferred Ascend.  In reality, 
many dialup ISPs used wholesale modem banks and their only expense was 
advertising, and their only asset was customers.

 

From: AF  On Behalf Of ch...@wbmfg.com
Sent: Friday, August 21, 2020 8:42 PM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

Say your revenue is $1M per year, but your net income is –$250K.  What is that 
worth?  

Negative amounts.  You would probably have to pay someone to buy it.  

 

Another company has revenue of $1M.  Net income of +250K year after year.  What 
is it worth.  

At least $1M.

 

These are income base approaches.  There are net asset based/cost approaches.  
They attempt to value the fair market value of the assets.  

 

And there are market approaches.  What is your book worth.  

 

You really have to look at all three.  Back in the day when I was doing lots of 
acquisitions I would give you $250-$500 per customer (market approach) and 
$1000 per customer if it was a good Canopy network (combination of Market and 
Asset approach).  But that is because we had some pretty expert knowledge on 
what those were worth.  The ebidta approach (net income) was somewhat worthless 
because many of these guys either milked the companies dry or were simply bad 
at business.  

 

But if they do have a nice EBIDTA year after year, you can make an offer based 
on that alone believing you can operate as well or better than they did.  But 
you really need to look at all three methods and analyze the potential changes 
in the competition picture etc.  

 

But there is NO valuation method that only looks at revenue.  People with 
crappy companies will try to tell unsophisticated potential buyers that a 1X or 
2X revenue is “the standard way” to value a business.  BS.

 

From: Forrest Christian (List Account) 

Sent: Friday, August 21, 2020 7:21 PM

To: AnimalFarm Microwave Users Group 

Subject: Re: [AFMUG] Buying and selling ISP’s

 

The last one we looked at purchasing, the owner wanted "much more than 1x 
revenue".   We knew from experience with the gear they were using, and the way 
that they had it all put together that it was going to require replacing every 
bit of gear in the network and in some cases fixing towers themselves.   We 
walked away from that one.   Would have been happy to have their customer base, 
but it wasn't worth what the owner was demanding. 

 

On the other hand, if one walked into a network that was using similar gear, 
was designed well, and so on, paying a premium would have been worth it.   

 

On Fri, Aug 21, 2020 at 6:26 PM Ryan Ray mailto:ryan...@gmail.com> > wrote:

I don't know about your business, but mine is run so nicely that if someone 
bought it, you wouldn't have to do shit all other than billing and normal 
troubleshooting. That's why anyone who does a generalized "ISP is worth x* 
dollars" doesn't make any sense. It's so dependant on the business and the 
area. 

 

On Fri, Aug 21, 2020 at 5:02 PM Ken Hohhof mailto:af...@kwisp.com> > wrote:

I heard an “expert” once on a radio show advising small business owners how to 
prep their business for sale.  The advice was to cut costs to inflate EBITDA 
because that’s what the sale price would be based on.  So if the seller 
followed that advice, network upgrades and maintenance would have been 
neglected.  On the other hand, if you planned to cut redundant staff, some of 
that might have already been done.

 

 

From: AF mailto:af-boun...@af.afmug.com> > On Behalf 
Of cjwstudios
Sent: Friday, August 21, 2020 6:30 PM
To: AnimalFarm Microwave Users Group mailto:af@af.afmug.com> >
Subject: Re: [AFMUG] Buying and selling ISP’s

 

1x annual revenue and hope the customers stay on

 

On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes mailto:mattli...@rivervalleyinternet.net> > wrote:

This is the issue I’ve always had when I’ve looked at buying an ISP. It always 
seems like a lot more money I would have to put out to buy then I could just 
build and take th

Re: [AFMUG] Buying and selling ISP’s

[chuck]

Say your revenue is $1M per year, but your net income is –$250K.  What is that 
worth?  
Negative amounts.  You would probably have to pay someone to buy it.  

Another company has revenue of $1M.  Net income of +250K year after year.  What 
is it worth.  
At least $1M.

These are income base approaches.  There are net asset based/cost approaches.  
They attempt to value the fair market value of the assets.  

And there are market approaches.  What is your book worth.  

You really have to look at all three.  Back in the day when I was doing lots of 
acquisitions I would give you $250-$500 per customer (market approach) and 
$1000 per customer if it was a good Canopy network (combination of Market and 
Asset approach).  But that is because we had some pretty expert knowledge on 
what those were worth.  The ebidta approach (net income) was somewhat worthless 
because many of these guys either milked the companies dry or were simply bad 
at business.  

But if they do have a nice EBIDTA year after year, you can make an offer based 
on that alone believing you can operate as well or better than they did.  But 
you really need to look at all three methods and analyze the potential changes 
in the competition picture etc.  

But there is NO valuation method that only looks at revenue.  People with 
crappy companies will try to tell unsophisticated potential buyers that a 1X or 
2X revenue is “the standard way” to value a business.  BS.

From: Forrest Christian (List Account) 
Sent: Friday, August 21, 2020 7:21 PM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

The last one we looked at purchasing, the owner wanted "much more than 1x 
revenue".   We knew from experience with the gear they were using, and the way 
that they had it all put together that it was going to require replacing every 
bit of gear in the network and in some cases fixing towers themselves.   We 
walked away from that one.   Would have been happy to have their customer base, 
but it wasn't worth what the owner was demanding. 

On the other hand, if one walked into a network that was using similar gear, 
was designed well, and so on, paying a premium would have been worth it.   

On Fri, Aug 21, 2020 at 6:26 PM Ryan Ray  wrote:

  I don't know about your business, but mine is run so nicely that if someone 
bought it, you wouldn't have to do shit all other than billing and normal 
troubleshooting. That's why anyone who does a generalized "ISP is worth x* 
dollars" doesn't make any sense. It's so dependant on the business and the 
area. 

  On Fri, Aug 21, 2020 at 5:02 PM Ken Hohhof  wrote:

I heard an “expert” once on a radio show advising small business owners how 
to prep their business for sale.  The advice was to cut costs to inflate EBITDA 
because that’s what the sale price would be based on.  So if the seller 
followed that advice, network upgrades and maintenance would have been 
neglected.  On the other hand, if you planned to cut redundant staff, some of 
that might have already been done.





From: AF  On Behalf Of cjwstudios
Sent: Friday, August 21, 2020 6:30 PM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s



1x annual revenue and hope the customers stay on



On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes 
 wrote:

  This is the issue I’ve always had when I’ve looked at buying an ISP. It 
always seems like a lot more money I would have to put out to buy then I could 
just build and take the customers if something is wrong with the current 
network.



  > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:

  > 

  > On 8/20/20 8:13 PM, Steve Jones wrote:

  >> I think you either buy or sell, isp isnt really a flip thing

  > 

  > 

  > There is/was someone in my part of the country buying up ISPs and 
trying to package them all together as a flip. My ISP customers tell me it's 
far easier to get the flipper's customers to cancel and switch than buy their 
company.

  > 

  > -- 

  > AF mailing list

  > AF@af.afmug.com

  > http://af.afmug.com/mailman/listinfo/af_af.afmug.com



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Re: [AFMUG] Buying and selling ISP’s

[Forrest Christian (List Account)]

I don't have a lot of acquisition experience.   It's been many years since
we acquired anyone so take the following with a grain of salt.

I would argue that the only thing of value in many WISPs are their
customers.   So you have to start with how much you think those customers
are worth once you transition them to your network, which is basically
revenue.  In my mind, 1X *expected* revenue is a good figure for a WISP
that their network is good enough that you don't have to immediately dump a
pile of cash in, but you expect to basically forklift the entire thing onto
your network over the next 12 months.

One has to factor in some costs and assets as well.   A WISP which has
built their own high-quality tower sites and owns the ground under them is
going to be worth more than a wisp which is leasing vertical space at too
high of a price.   The right equipment being in place to match your network
adds value.   Old crap which has to be immediately replaced reduces it.

At some point, I guess this comes down to EBIDTA, but there are so many
ways a WISP can mess with the expense side of the equation that I would be
skeptical that the figure produced by an existing owner is the right one.
  I.E. how much salary the owner is taking, how many employees, what types
of vehicles are being purchased/used, are they deploying high end cambium
gear or the cheapest thing they can find from china, and on and on.

On Fri, Aug 21, 2020 at 7:21 PM Chuck McCown  wrote:

> 5 x ebidta
> Revenue multiples are of no value.
>
> Sent from my iPhone
>
> On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:
>
> 
> 1x annual revenue and hope the customers stay on
>
> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes <
> mattli...@rivervalleyinternet.net> wrote:
>
>> This is the issue I’ve always had when I’ve looked at buying an ISP. It
>> always seems like a lot more money I would have to put out to buy then I
>> could just build and take the customers if something is wrong with the
>> current network.
>>
>>
>>
>> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
>>
>> >
>>
>> > On 8/20/20 8:13 PM, Steve Jones wrote:
>>
>> >> I think you either buy or sell, isp isnt really a flip thing
>>
>> >
>>
>> >
>>
>> > There is/was someone in my part of the country buying up ISPs and
>> trying to package them all together as a flip. My ISP customers tell me
>> it's far easier to get the flipper's customers to cancel and switch than
>> buy their company.
>>
>> >
>>
>> > --
>>
>> > AF mailing list
>>
>> > AF@af.afmug.com
>>
>> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
>>
>>
>> --
>>
>> AF mailing list
>>
>> AF@af.afmug.com
>>
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
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Re: [AFMUG] Buying and selling ISP’s

[Forrest Christian (List Account)]

The last one we looked at purchasing, the owner wanted "much more than 1x
revenue".   We knew from experience with the gear they were using, and the
way that they had it all put together that it was going to require
replacing every bit of gear in the network and in some cases fixing towers
themselves.   We walked away from that one.   Would have been happy to have
their customer base, but it wasn't worth what the owner was demanding.

On the other hand, if one walked into a network that was using similar
gear, was designed well, and so on, paying a premium would have been worth
it.

On Fri, Aug 21, 2020 at 6:26 PM Ryan Ray  wrote:

> I don't know about your business, but mine is run so nicely that if
> someone bought it, you wouldn't have to do shit all other than billing and
> normal troubleshooting. That's why anyone who does a generalized "ISP is
> worth x* dollars" doesn't make any sense. It's so dependant on the business
> and the area.
>
> On Fri, Aug 21, 2020 at 5:02 PM Ken Hohhof  wrote:
>
>> I heard an “expert” once on a radio show advising small business owners
>> how to prep their business for sale.  The advice was to cut costs to
>> inflate EBITDA because that’s what the sale price would be based on.  So if
>> the seller followed that advice, network upgrades and maintenance would
>> have been neglected.  On the other hand, if you planned to cut redundant
>> staff, some of that might have already been done.
>>
>>
>>
>>
>>
>> *From:* AF  *On Behalf Of *cjwstudios
>> *Sent:* Friday, August 21, 2020 6:30 PM
>> *To:* AnimalFarm Microwave Users Group 
>> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>>
>>
>>
>> 1x annual revenue and hope the customers stay on
>>
>>
>>
>> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes <
>> mattli...@rivervalleyinternet.net> wrote:
>>
>> This is the issue I’ve always had when I’ve looked at buying an ISP. It
>> always seems like a lot more money I would have to put out to buy then I
>> could just build and take the customers if something is wrong with the
>> current network.
>>
>>
>>
>> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
>>
>> >
>>
>> > On 8/20/20 8:13 PM, Steve Jones wrote:
>>
>> >> I think you either buy or sell, isp isnt really a flip thing
>>
>> >
>>
>> >
>>
>> > There is/was someone in my part of the country buying up ISPs and
>> trying to package them all together as a flip. My ISP customers tell me
>> it's far easier to get the flipper's customers to cancel and switch than
>> buy their company.
>>
>> >
>>
>> > --
>>
>> > AF mailing list
>>
>> > AF@af.afmug.com
>>
>> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
>>
>>
>> --
>>
>> AF mailing list
>>
>> AF@af.afmug.com
>>
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
>> --
>> AF mailing list
>> AF@af.afmug.com
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
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Re: [AFMUG] Buying and selling ISP’s

[Chuck McCown]

5 x ebidta
Revenue multiples are of no value.

Sent from my iPhone

> On Aug 21, 2020, at 5:30 PM, cjwstudios  wrote:
> 
> 
> 1x annual revenue and hope the customers stay on
> 
>> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes 
>>  wrote:
>> This is the issue I’ve always had when I’ve looked at buying an ISP. It 
>> always seems like a lot more money I would have to put out to buy then I 
>> could just build and take the customers if something is wrong with the 
>> current network.
>> 
>> 
>> 
>> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
>> 
>> > 
>> 
>> > On 8/20/20 8:13 PM, Steve Jones wrote:
>> 
>> >> I think you either buy or sell, isp isnt really a flip thing
>> 
>> > 
>> 
>> > 
>> 
>> > There is/was someone in my part of the country buying up ISPs and trying 
>> > to package them all together as a flip. My ISP customers tell me it's far 
>> > easier to get the flipper's customers to cancel and switch than buy their 
>> > company.
>> 
>> > 
>> 
>> > -- 
>> 
>> > AF mailing list
>> 
>> > AF@af.afmug.com
>> 
>> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>> 
>> 
>> 
>> -- 
>> 
>> AF mailing list
>> 
>> AF@af.afmug.com
>> 
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>> 
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Re: [AFMUG] Buying and selling ISP’s

[cjwstudios]

Anyone got one in the BaWa, Ashburn, Pittsburg area let me know :)

On Fri, Aug 21, 2020 at 7:26 PM Ryan Ray  wrote:

> I don't know about your business, but mine is run so nicely that if
> someone bought it, you wouldn't have to do shit all other than billing and
> normal troubleshooting. That's why anyone who does a generalized "ISP is
> worth x* dollars" doesn't make any sense. It's so dependant on the business
> and the area.
>
> On Fri, Aug 21, 2020 at 5:02 PM Ken Hohhof  wrote:
>
>> I heard an “expert” once on a radio show advising small business owners
>> how to prep their business for sale.  The advice was to cut costs to
>> inflate EBITDA because that’s what the sale price would be based on.  So if
>> the seller followed that advice, network upgrades and maintenance would
>> have been neglected.  On the other hand, if you planned to cut redundant
>> staff, some of that might have already been done.
>>
>>
>>
>>
>>
>> *From:* AF  *On Behalf Of *cjwstudios
>> *Sent:* Friday, August 21, 2020 6:30 PM
>> *To:* AnimalFarm Microwave Users Group 
>> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>>
>>
>>
>> 1x annual revenue and hope the customers stay on
>>
>>
>>
>> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes <
>> mattli...@rivervalleyinternet.net> wrote:
>>
>> This is the issue I’ve always had when I’ve looked at buying an ISP. It
>> always seems like a lot more money I would have to put out to buy then I
>> could just build and take the customers if something is wrong with the
>> current network.
>>
>>
>>
>> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
>>
>> >
>>
>> > On 8/20/20 8:13 PM, Steve Jones wrote:
>>
>> >> I think you either buy or sell, isp isnt really a flip thing
>>
>> >
>>
>> >
>>
>> > There is/was someone in my part of the country buying up ISPs and
>> trying to package them all together as a flip. My ISP customers tell me
>> it's far easier to get the flipper's customers to cancel and switch than
>> buy their company.
>>
>> >
>>
>> > --
>>
>> > AF mailing list
>>
>> > AF@af.afmug.com
>>
>> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
>>
>>
>> --
>>
>> AF mailing list
>>
>> AF@af.afmug.com
>>
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
>> --
>>
>>
>> AF mailing list
>>
>>
>> AF@af.afmug.com
>>
>>
>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
>>
>>
>
> --
>
> AF mailing list
>
> AF@af.afmug.com
>
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Re: [AFMUG] Buying and selling ISP’s

[Ryan Ray]

I don't know about your business, but mine is run so nicely that if someone
bought it, you wouldn't have to do shit all other than billing and normal
troubleshooting. That's why anyone who does a generalized "ISP is worth x*
dollars" doesn't make any sense. It's so dependant on the business and the
area.

On Fri, Aug 21, 2020 at 5:02 PM Ken Hohhof  wrote:

> I heard an “expert” once on a radio show advising small business owners
> how to prep their business for sale.  The advice was to cut costs to
> inflate EBITDA because that’s what the sale price would be based on.  So if
> the seller followed that advice, network upgrades and maintenance would
> have been neglected.  On the other hand, if you planned to cut redundant
> staff, some of that might have already been done.
>
>
>
>
>
> *From:* AF  *On Behalf Of *cjwstudios
> *Sent:* Friday, August 21, 2020 6:30 PM
> *To:* AnimalFarm Microwave Users Group 
> *Subject:* Re: [AFMUG] Buying and selling ISP’s
>
>
>
> 1x annual revenue and hope the customers stay on
>
>
>
> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes <
> mattli...@rivervalleyinternet.net> wrote:
>
> This is the issue I’ve always had when I’ve looked at buying an ISP. It
> always seems like a lot more money I would have to put out to buy then I
> could just build and take the customers if something is wrong with the
> current network.
>
>
>
> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
>
> >
>
> > On 8/20/20 8:13 PM, Steve Jones wrote:
>
> >> I think you either buy or sell, isp isnt really a flip thing
>
> >
>
> >
>
> > There is/was someone in my part of the country buying up ISPs and trying
> to package them all together as a flip. My ISP customers tell me it's far
> easier to get the flipper's customers to cancel and switch than buy their
> company.
>
> >
>
> > --
>
> > AF mailing list
>
> > AF@af.afmug.com
>
> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>
>
>
> --
>
> AF mailing list
>
> AF@af.afmug.com
>
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>
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Re: [AFMUG] Buying and selling ISP’s

[Ken Hohhof]

I heard an “expert” once on a radio show advising small business owners how to 
prep their business for sale.  The advice was to cut costs to inflate EBITDA 
because that’s what the sale price would be based on.  So if the seller 
followed that advice, network upgrades and maintenance would have been 
neglected.  On the other hand, if you planned to cut redundant staff, some of 
that might have already been done.

 

 

From: AF  On Behalf Of cjwstudios
Sent: Friday, August 21, 2020 6:30 PM
To: AnimalFarm Microwave Users Group 
Subject: Re: [AFMUG] Buying and selling ISP’s

 

1x annual revenue and hope the customers stay on

 

On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes mailto:mattli...@rivervalleyinternet.net> > wrote:

This is the issue I’ve always had when I’ve looked at buying an ISP. It always 
seems like a lot more money I would have to put out to buy then I could just 
build and take the customers if something is wrong with the current network.



> On Aug 21, 2020, at 12:43 PM, Seth Mattinen  <mailto:se...@rollernet.us> > wrote:

> 

> On 8/20/20 8:13 PM, Steve Jones wrote:

>> I think you either buy or sell, isp isnt really a flip thing

> 

> 

> There is/was someone in my part of the country buying up ISPs and trying to 
> package them all together as a flip. My ISP customers tell me it's far easier 
> to get the flipper's customers to cancel and switch than buy their company.

> 

> -- 

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> AF@af.afmug.com <mailto:AF@af.afmug.com> 

> http://af.afmug.com/mailman/listinfo/af_af.afmug.com



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Re: [AFMUG] Buying and selling ISP’s

[cjwstudios]

1x annual revenue and hope the customers stay on

On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes <
mattli...@rivervalleyinternet.net> wrote:

> This is the issue I’ve always had when I’ve looked at buying an ISP. It
> always seems like a lot more money I would have to put out to buy then I
> could just build and take the customers if something is wrong with the
> current network.
>
>
>
> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
>
> >
>
> > On 8/20/20 8:13 PM, Steve Jones wrote:
>
> >> I think you either buy or sell, isp isnt really a flip thing
>
> >
>
> >
>
> > There is/was someone in my part of the country buying up ISPs and trying
> to package them all together as a flip. My ISP customers tell me it's far
> easier to get the flipper's customers to cancel and switch than buy their
> company.
>
> >
>
> > --
>
> > AF mailing list
>
> > AF@af.afmug.com
>
> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>
>
>
> --
>
> AF mailing list
>
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>
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Re: [AFMUG] Buying and selling ISP’s

[Matt Hoppes]

This is the issue I’ve always had when I’ve looked at buying an ISP. It always 
seems like a lot more money I would have to put out to buy then I could just 
build and take the customers if something is wrong with the current network.

> On Aug 21, 2020, at 12:43 PM, Seth Mattinen  wrote:
> 
> On 8/20/20 8:13 PM, Steve Jones wrote:
>> I think you either buy or sell, isp isnt really a flip thing
> 
> 
> There is/was someone in my part of the country buying up ISPs and trying to 
> package them all together as a flip. My ISP customers tell me it's far easier 
> to get the flipper's customers to cancel and switch than buy their company.
> 
> -- 
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Re: [AFMUG] Buying and selling ISP’s

[Seth Mattinen]

On 8/20/20 8:13 PM, Steve Jones wrote:

I think you either buy or sell, isp isnt really a flip thing



There is/was someone in my part of the country buying up ISPs and trying 
to package them all together as a flip. My ISP customers tell me it's 
far easier to get the flipper's customers to cancel and switch than buy 
their company.


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Re: [AFMUG] Buying and selling ISP’s

[Lewis Bergman]

love/hate you mean

On Fri, Aug 21, 2020 at 7:59 AM cjwstudios  wrote:

> Yes definitely not a flip.  My last ISP was a 10 year labor of love.
>
> On Thu, Aug 20, 2020 at 10:14 PM Steve Jones 
> wrote:
>
>> I think you either buy or sell, isp isnt really a flip thing
>>
>> On Thu, Aug 20, 2020, 8:57 PM Chuck McCown  wrote:
>>
>>> Sure.  Rise/digits and whatever else they were called used to be one of
>>> the largest buyers out there.  If the price is right anyone is likely to
>>> sell.
>>>
>>> Sent from my iPhone
>>>
>>> > On Aug 20, 2020, at 7:46 PM, cjwstudios  wrote:
>>> >
>>> > 
>>> > Do folks still buy and sell ISP’s?  I was bored and thinking about
>>> getting back into climbing ladders.  I need the exercise.
>>> >
>>> > Best,
>>> > CJ
>>> > --
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>>> > AF@af.afmug.com
>>> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>>
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>>>
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>>
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Re: [AFMUG] Buying and selling ISP’s

[cjwstudios]

Yes definitely not a flip.  My last ISP was a 10 year labor of love.

On Thu, Aug 20, 2020 at 10:14 PM Steve Jones 
wrote:

> I think you either buy or sell, isp isnt really a flip thing
>
> On Thu, Aug 20, 2020, 8:57 PM Chuck McCown  wrote:
>
>> Sure.  Rise/digits and whatever else they were called used to be one of
>> the largest buyers out there.  If the price is right anyone is likely to
>> sell.
>>
>> Sent from my iPhone
>>
>> > On Aug 20, 2020, at 7:46 PM, cjwstudios  wrote:
>> >
>> > 
>> > Do folks still buy and sell ISP’s?  I was bored and thinking about
>> getting back into climbing ladders.  I need the exercise.
>> >
>> > Best,
>> > CJ
>> > --
>> > AF mailing list
>> > AF@af.afmug.com
>> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>>
>> --
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Re: [AFMUG] Buying and selling ISP’s

[Steve Jones]

I think you either buy or sell, isp isnt really a flip thing

On Thu, Aug 20, 2020, 8:57 PM Chuck McCown  wrote:

> Sure.  Rise/digits and whatever else they were called used to be one of
> the largest buyers out there.  If the price is right anyone is likely to
> sell.
>
> Sent from my iPhone
>
> > On Aug 20, 2020, at 7:46 PM, cjwstudios  wrote:
> >
> > 
> > Do folks still buy and sell ISP’s?  I was bored and thinking about
> getting back into climbing ladders.  I need the exercise.
> >
> > Best,
> > CJ
> > --
> > AF mailing list
> > AF@af.afmug.com
> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
>
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Re: [AFMUG] Buying and selling ISP’s

[Chuck McCown]

Sure.  Rise/digits and whatever else they were called used to be one of the 
largest buyers out there.  If the price is right anyone is likely to sell.

Sent from my iPhone

> On Aug 20, 2020, at 7:46 PM, cjwstudios  wrote:
> 
> 
> Do folks still buy and sell ISP’s?  I was bored and thinking about getting 
> back into climbing ladders.  I need the exercise.
> 
> Best,
> CJ
> -- 
> AF mailing list
> AF@af.afmug.com
> http://af.afmug.com/mailman/listinfo/af_af.afmug.com

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[AFMUG] Buying and selling ISP’s

[cjwstudios]

Do folks still buy and sell ISP’s?  I was bored and thinking about getting
back into climbing ladders.  I need the exercise.

Best,
CJ
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